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Browsing Postgraduate Theses and Projects by Author "Abdirahman, Faiza Ali"

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    Evaluation of financial measures on performance of Islamic banks in Nairobi county, Kenya
    (Mount Kenya University, 2024-06) Abdirahman, Faiza Ali
    Financial measures in Islamic banking include increased profitability, better liquidity and cost effectiveness. Islamic financial markets are not performing to their optimal point since Islamic banking cannot develop on its own without the other components of Islamic financial system. The aim of this study is to investigate the influence of financial measures on performance of Islamic banks in Nairobi County. The objectives were: - to explore the influence of market value measures on performance of Islamic banks in Nairobi county; to analyse the influence of liquidity measures on performance of Islamic banks in Nairobi county; to evaluate the influence of leverage measures on performance of Islamic banks in Nairobi county and to determine the influence of asset management measures on performance of Islamic banks in Nairobi county. The research was guided by cost management and asset management theory, theory of constraints, Modigliani and Miller propositions and the real options theory. Descriptive research design will be employed. The population were the three islamic banks in Nairobi county, which offer Islamic banking exclusively. These were DIB Bank Kenya Limited, First Community Bank and Gulf African Bank. A data collection sheet was used to gather secondary data from the Islamic banks in Nairobi County. Secondary data from the published financial statements of the three islamic banks in Nairobi county for 5 years was used, and spanned the years 2017 to 2021. The collected data was subjected to diagnostic tests. Data was analysed through descriptive and inferential statistics. Correlation and regression were used to show associations between the variables. Tables were used to present numerical data with interpretations. The study revealed a positive and significant effect of market value on performance of Islamic banks in Nairobi county (p-value < 0.05), a positive and significant effect of liquidity on performance of Islamic banks in Nairobi county (p-value < 0.05), a positive and significant effect of leverage on performance of Islamic banks in Nairobi county (p-value < 0.05) and a positive and significant effect of asset management on performance of Islamic banks in Nairobi county (p-value < 0.05). Market value of a firm helps investors assess the market value of the firm’s stock and make informed decisions. Liquidity, leverage and asset management are critical financial measures of the performance of islamic banks. It was recommended that Islamic banks should conduct accurate market value, which can instill confidence among potential investors and existing shareholders. Islamic banks in Nairobi County should prioritize the enhancement of their liquidity position, through prudent working capital management. This study recommends that Islamic banks in Nairobi County should consider enhancing leverage to achieve an optimal capital structure and thereby, performance. Effective asset management is critical for Islamic banks to achieve optimal performance. It involves the prudent use of their assets to generate revenue streams that can, in turn, support the overall performance of the banks.