School of Business and Economis

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Browsing School of Business and Economis by Subject "Asset management"

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    PublicationOpen Access
    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.
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    PublicationOpen Access
    Influence of current asset management on financial performance of selected savings and credit cooperative societies in Meru county, Kenya
    (Mount Kenya University, 2024-06) Chari, Gubo Mato
    Saccos were intended to provide a variety of financial services tailored to market demands for their clients. To successfully offer these services, they needed a well-managed and robust current asset’s structure, maintained by qualified personnel. Effective asset management would enable Saccos to meet their obligations promptly. However, Kenyan Saccos have faced issues with low liquidity ratios, struggling to maintain the required 15% monthly legal cashflow ratios, often relying on expensive bank loans for support. The main aim of the study was to investigate how current asset management influences the financial performance of savings and credit cooperative societies in Meru County, Kenya. The specific objectives were to assess the impact of cash management, debtors’ management, short-term securities management, and inventory management on the financial performance of these societies. The study applied pecking order theory to cash and short-term securities management, contingency theory to debt management, and resource-based view theory to inventory management. A descriptive research design was chosen to gather data from 24 deposit and non-deposit Saccos in Meru County. The sample included 42 customer care officers, 114 tellers, 93 back-office staff, and 120 loans officers, totaling 369 respondents. Using a simple random sampling method, the study selected 13 customer care officers, 34 tellers, 28 back-office staff, and 36 loans officers, totaling 111 respondents. Both quantitative and qualitative data were collected using closed-ended questionnaires and financial statements. A pilot study was conducted at Unison Sacco in Isiolo County with a sample of 1 customer care officer, 3 tellers, 3 back- office staff, and 4 loan officers. Reliability was assessed using Cronbach's alpha coefficients, and validity was measured through face, content, and construct types. Data analysis was performed using SPSS version 24, including both quantitative and qualitative data from questionnaires and financial reports. Descriptive statistics such as frequency, percentage, and mean were calculated. Diagnostic statistics including normality, linearity, multicollinearity, and correlation tests were conducted to ensure data suitability. Inferential statistics such as model summary, ANOVA, and regression coefficients were also utilized. The findings were essential for Sacco management, providing insights into how the management of various current assets—such as cash, debtors, short-term securities, and inventory—can be optimized to enhance the liquidity of the institutions.