Purpose of the Study: This research study assessed the effect of Lean stock practices on the supply chain leverage of sugar manufacturing firms in Kenya. Statement of the Problem: Existing evidence from other contexts indicates that Lean stock practices significantly and positively influence sustainable performance in state corporate firms. However, most public sugar manufacturing firms in Kenya are facing supply chain leverage challenges, with over 70% of these firms on the verge of collapse, and an additional 10% have completely shut down. This raises the question of whether Lean stock practices, as an aspect of inventory control mechanisms, could be the missing link undermining the supply chain leverage of sugar manufacturing firms in Kenya; a phenomenon this study aims to investigate. Methodology: A census survey was conducted on all 15 sugar manufacturing firms in Kenya, forming the unit of analysis. A sample size of 241 respondents, consisting of procurement officers, finance officers, production managers, and senior managers, was randomly obtained from the sugar manufacturing firms. Convenience sampling was then used to select officers and managers from these firms. Structured and semi-structured research questionnaires were used to collect primary data from the respondents, with questionnaires dropped and picked up later to improve the response rate. The qualitative and quantitative data collected was analyzed using descriptive
{"title":"EFFECT OF LEAN STOCK PRACTICE ON SUPPLY CHAIN LEVERAGE OF SUGAR MANUFACTURING FIRMS IN KENYA","authors":"A. Oloo, Dr. Anthony Osoro, Dr. Peter Mwangi","doi":"10.53819/6789797a8094","DOIUrl":"https://doi.org/10.53819/6789797a8094","url":null,"abstract":"Purpose of the Study: This research study assessed the effect of Lean stock practices on the supply chain leverage of sugar manufacturing firms in Kenya. Statement of the Problem: Existing evidence from other contexts indicates that Lean stock practices significantly and positively influence sustainable performance in state corporate firms. However, most public sugar manufacturing firms in Kenya are facing supply chain leverage challenges, with over 70% of these firms on the verge of collapse, and an additional 10% have completely shut down. This raises the question of whether Lean stock practices, as an aspect of inventory control mechanisms, could be the missing link undermining the supply chain leverage of sugar manufacturing firms in Kenya; a phenomenon this study aims to investigate. Methodology: A census survey was conducted on all 15 sugar manufacturing firms in Kenya, forming the unit of analysis. A sample size of 241 respondents, consisting of procurement officers, finance officers, production managers, and senior managers, was randomly obtained from the sugar manufacturing firms. Convenience sampling was then used to select officers and managers from these firms. Structured and semi-structured research questionnaires were used to collect primary data from the respondents, with questionnaires dropped and picked up later to improve the response rate. The qualitative and quantitative data collected was analyzed using descriptive","PeriodicalId":39488,"journal":{"name":"Afro-Asian Journal of Finance and Accounting","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-07-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82026338","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Profitability serves as one of the determinants of both capital structure and stock returns in Australia. This paper looks at bank specific profitability. Researchers take into consideration two actions of financial institution performance: bank productivity (determined as profits separated by properties), and financial institution passion margins (measured as web interest income split by assets). It is commonplace to highlight that in order for a company to have the needed sources in regards to properties, they need to elevate the capital. The years given that the onset of the global financial situation has actually brought about significant architectural adjustments in the financial sector. The crisis revealed considerable weaknesses in the financial system of Australia as well as the prudential framework, bring about too much financing and also risk-taking unsupported by ample capital as well as liquidity buffers. The impacts of the crisis have taxed financial growth, monetary stability and also financial institution performance in several territories including in Australia, although the headwinds have begun to subside. Technical adjustment, increased non-bank competitors as well as changes in globalization are still broader ecological difficulties facing the financial system. Regulators have reacted to the crisis by reforming the international prudential structure and improving supervision. The study was a literature based in which literature from far and wide were reviewed to derive study themes. The findings revealed that Banks in Australia have boosted their durability to future risks by significantly accumulating funding and also liquidity barriers. The boosted use anxiety testing by banks and also managers since the situation additionally attends to greater strength on a positive basis, which ought to aid support credit circulations in excellent as well as hard times. Furthermore, progressed economic situation financial institutions have moved to even more stable funding resources and also purchased more secure as well as less complex assets. Several of these changes may be driven partly by intermittent aspects, such as accommodative monetary policy, and also hence may lessen as conditions transform. Qualitative evidence indicates that financial institutions have significantly enhanced their threat management and also internal control practices. Although these modifications are tough to analyze, scientists point to substantial range for further enhancements, in particular because of the inherent unpredictability regarding the future development of risks. The research concludes that the financial obligation ratios make contrast of the overall debt with the complete properties owned by the company and a low proportion shows that a company depends much less on debt while a high percentage suggests that a firm count a lot more on financial debt money. The findings of this research study have important policy implications on the individual ba
{"title":"The Impact of Capital Structure on the Operational Efficiency of Commercial Banks Listed on the Australian Stock Exchange","authors":"Nicole J. Blanchette","doi":"10.53819/81018102t4177","DOIUrl":"https://doi.org/10.53819/81018102t4177","url":null,"abstract":"Profitability serves as one of the determinants of both capital structure and stock returns in Australia. This paper looks at bank specific profitability. Researchers take into consideration two actions of financial institution performance: bank productivity (determined as profits separated by properties), and financial institution passion margins (measured as web interest income split by assets). It is commonplace to highlight that in order for a company to have the needed sources in regards to properties, they need to elevate the capital. The years given that the onset of the global financial situation has actually brought about significant architectural adjustments in the financial sector. The crisis revealed considerable weaknesses in the financial system of Australia as well as the prudential framework, bring about too much financing and also risk-taking unsupported by ample capital as well as liquidity buffers. The impacts of the crisis have taxed financial growth, monetary stability and also financial institution performance in several territories including in Australia, although the headwinds have begun to subside. Technical adjustment, increased non-bank competitors as well as changes in globalization are still broader ecological difficulties facing the financial system. Regulators have reacted to the crisis by reforming the international prudential structure and improving supervision. The study was a literature based in which literature from far and wide were reviewed to derive study themes. The findings revealed that Banks in Australia have boosted their durability to future risks by significantly accumulating funding and also liquidity barriers. The boosted use anxiety testing by banks and also managers since the situation additionally attends to greater strength on a positive basis, which ought to aid support credit circulations in excellent as well as hard times. Furthermore, progressed economic situation financial institutions have moved to even more stable funding resources and also purchased more secure as well as less complex assets. Several of these changes may be driven partly by intermittent aspects, such as accommodative monetary policy, and also hence may lessen as conditions transform. Qualitative evidence indicates that financial institutions have significantly enhanced their threat management and also internal control practices. Although these modifications are tough to analyze, scientists point to substantial range for further enhancements, in particular because of the inherent unpredictability regarding the future development of risks. The research concludes that the financial obligation ratios make contrast of the overall debt with the complete properties owned by the company and a low proportion shows that a company depends much less on debt while a high percentage suggests that a firm count a lot more on financial debt money. The findings of this research study have important policy implications on the individual ba","PeriodicalId":39488,"journal":{"name":"Afro-Asian Journal of Finance and Accounting","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-07-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"89592166","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The research focused on the effect of credit risk management on the performance of commercial banks in Rwanda. A case of Cogebank Rwanda PLC. The study specifically analysed the effects of credit appraisal, credit risks identification, credit risks monitoring and control and credit collection on the performance of Cogebank, Rwanda PLC. The study covered the period of four years from 2018 up to 2021. In term of research methodology, the study adopted a cross section research design and used questionnaire, interview and documentation as main tools of data collection. The study adopted censes approach and considered all 35 staff from two departments accounting and credit departments which were purposively selected. Researcher also analyzed the collected data using Statistical Product and Service Solutions (SPSS). The results showed that the bank granted loans of 95.8%; 97.3%; 92.4% and 85.0% respectively of their deposits from 2018 to 2021. And looking at BNR’s regulations on the loan granting it is clear that the commercial bank must not exceed 80% of deposit collected when granting loans. From 2018 up to 2021 the ratio of Return on Equity was as following: 12.62%; 13.63%; 12.24% and 13.79% respectively. The results show the value of adjusted R2 is 0.650 implying that there was a variation of 65% of performance of Cogebank Rwanda PLC which was explained by the four credit risk management strategies adopted by the bank namely credit risk appraisal, credit risk identification, credit risk analysis, and credit risk monitoring. This implies that, credit risk appraisal, credit risk identification, credit risk analysis, and credit risk monitoring explained 65% of performance at a confidence level of 95%. This study recommends that Cogebank Rwanda Plc should improve loan recovery procedures for better loan management, should improve the implementation of guarantee policies for better loan management and since the latter has significant effect on performance of the bank. Keywords: Credit Risk Management, Commercial Banks Performance, Cogebank Rwanda Plc. Rwandan Banking Sector, Financial Stability
{"title":"Effect of Credit Risk Management on the Performance of Commercial Banks in Rwanda: A Case of Cogebank Rwanda Plc","authors":"Diogene Nsabimana","doi":"10.53819/81018102t4166","DOIUrl":"https://doi.org/10.53819/81018102t4166","url":null,"abstract":"The research focused on the effect of credit risk management on the performance of commercial banks in Rwanda. A case of Cogebank Rwanda PLC. The study specifically analysed the effects of credit appraisal, credit risks identification, credit risks monitoring and control and credit collection on the performance of Cogebank, Rwanda PLC. The study covered the period of four years from 2018 up to 2021. In term of research methodology, the study adopted a cross section research design and used questionnaire, interview and documentation as main tools of data collection. The study adopted censes approach and considered all 35 staff from two departments accounting and credit departments which were purposively selected. Researcher also analyzed the collected data using Statistical Product and Service Solutions (SPSS). The results showed that the bank granted loans of 95.8%; 97.3%; 92.4% and 85.0% respectively of their deposits from 2018 to 2021. And looking at BNR’s regulations on the loan granting it is clear that the commercial bank must not exceed 80% of deposit collected when granting loans. From 2018 up to 2021 the ratio of Return on Equity was as following: 12.62%; 13.63%; 12.24% and 13.79% respectively. The results show the value of adjusted R2 is 0.650 implying that there was a variation of 65% of performance of Cogebank Rwanda PLC which was explained by the four credit risk management strategies adopted by the bank namely credit risk appraisal, credit risk identification, credit risk analysis, and credit risk monitoring. This implies that, credit risk appraisal, credit risk identification, credit risk analysis, and credit risk monitoring explained 65% of performance at a confidence level of 95%. This study recommends that Cogebank Rwanda Plc should improve loan recovery procedures for better loan management, should improve the implementation of guarantee policies for better loan management and since the latter has significant effect on performance of the bank. Keywords: Credit Risk Management, Commercial Banks Performance, Cogebank Rwanda Plc. Rwandan Banking Sector, Financial Stability","PeriodicalId":39488,"journal":{"name":"Afro-Asian Journal of Finance and Accounting","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-07-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82361283","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
A country’s accounting and disclosure system is part of its financial system and more generally its institutional infrastructure. Economic theory suggests that, in well-functioning economies, the elements of the institutional infrastructure evolve to fit and reinforce each other. Thus, the accounting system is likely to be geared towards the informational and contracting needs of the key parties in the economy. Due to the existence of private information channels, financial statements are less important in terms of monitoring economic performance and assume other roles, such as determining dividends. However, for this reason, arm’s length or outside investors relying primarily on public disclosures are not as well informed in the German system as they are in Anglo-American economies. Since 2005, listed German groups have been required to prepare their consolidated accounts under International Financial Reporting Standards, IFRSs. The study was a literature based which sought to empirically assess the effect of voluntary non-financial disclosure on performance of financial firms listed on NYSE, United States. The study established that Non-financial reporting by German companies has long been a voluntary matter. As of fiscal year 2017, the CSR Directive Implementation Act makes it mandatory for some 500 large German companies. Non-financial reporting by German companies has long been a voluntary matter. Since the early 2000s, German companies have published non-financial information mostly as CSR or sustainability reports. Publishing comprehensive non-financial information will be mandatory as of fiscal year 2017 for some large German companies as a result of the CSR Directive Implementation Act. The CSR Directive Implementation Act obliges large companies of public interest, in particular, capital market-oriented companies, credit institutions, and insurance companies to publish non-financial information. The study concluded that since stock volatility is linked to information asymmetries and to a higher risk of a company, this analysis implies certain practical implications for both managers and regulators regarding the importance of specific disclosure strategy in capital markets. The study also concluded that the level of disclosed information, the interpretation and the effectiveness of forward-looking information depends on the reputation of a company. Companies disclosing nonfinancial information through sustainability reporting practices provide markets with data on their social, environmental, and governance performance. The study recommended that there is need to have a proper execution of regulatory framework which in turn increases the proper governance disclosures leading to an effective management system. Keywords: Voluntary, non-financial disclosure, performance, financial firms, listed NYSE, United States.
{"title":"Non-Financial Disclosure Policies and Their Influence on the Investor Behavior in NYSE-Listed Financial Firms","authors":"Naom G. Franklin","doi":"10.53819/81018102t4176","DOIUrl":"https://doi.org/10.53819/81018102t4176","url":null,"abstract":"A country’s accounting and disclosure system is part of its financial system and more generally its institutional infrastructure. Economic theory suggests that, in well-functioning economies, the elements of the institutional infrastructure evolve to fit and reinforce each other. Thus, the accounting system is likely to be geared towards the informational and contracting needs of the key parties in the economy. Due to the existence of private information channels, financial statements are less important in terms of monitoring economic performance and assume other roles, such as determining dividends. However, for this reason, arm’s length or outside investors relying primarily on public disclosures are not as well informed in the German system as they are in Anglo-American economies. Since 2005, listed German groups have been required to prepare their consolidated accounts under International Financial Reporting Standards, IFRSs. The study was a literature based which sought to empirically assess the effect of voluntary non-financial disclosure on performance of financial firms listed on NYSE, United States. The study established that Non-financial reporting by German companies has long been a voluntary matter. As of fiscal year 2017, the CSR Directive Implementation Act makes it mandatory for some 500 large German companies. Non-financial reporting by German companies has long been a voluntary matter. Since the early 2000s, German companies have published non-financial information mostly as CSR or sustainability reports. Publishing comprehensive non-financial information will be mandatory as of fiscal year 2017 for some large German companies as a result of the CSR Directive Implementation Act. The CSR Directive Implementation Act obliges large companies of public interest, in particular, capital market-oriented companies, credit institutions, and insurance companies to publish non-financial information. The study concluded that since stock volatility is linked to information asymmetries and to a higher risk of a company, this analysis implies certain practical implications for both managers and regulators regarding the importance of specific disclosure strategy in capital markets. The study also concluded that the level of disclosed information, the interpretation and the effectiveness of forward-looking information depends on the reputation of a company. Companies disclosing nonfinancial information through sustainability reporting practices provide markets with data on their social, environmental, and governance performance. The study recommended that there is need to have a proper execution of regulatory framework which in turn increases the proper governance disclosures leading to an effective management system. Keywords: Voluntary, non-financial disclosure, performance, financial firms, listed NYSE, United States.","PeriodicalId":39488,"journal":{"name":"Afro-Asian Journal of Finance and Accounting","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-07-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"77590243","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The Effect of Demographic Characteristics on the Relationship between Sentiment and Risk Appetite of Individual Investors at Nairobi Securities Exchange","authors":"Kitonyi Saiti","doi":"10.53819/81018102t2170","DOIUrl":"https://doi.org/10.53819/81018102t2170","url":null,"abstract":"The Effect of","PeriodicalId":39488,"journal":{"name":"Afro-Asian Journal of Finance and Accounting","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-07-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"90057614","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Internal Audit Practices and Financial Performance of Public Institutions in Rwanda: A Case of Rwanda Social Security Board","authors":"","doi":"10.53819/81018102t2168","DOIUrl":"https://doi.org/10.53819/81018102t2168","url":null,"abstract":"","PeriodicalId":39488,"journal":{"name":"Afro-Asian Journal of Finance and Accounting","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"75450750","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-06-27DOI: 10.11648/j.jfa.20231103.16
Dheseviano Emiaso, Gloria Ogochukwu Okafor
{"title":"Board Dynamics and Corporate Performance: The Moderating Effects of CEO Power A Study of Listed Non-Financial Firms in Sub-Sahara Africa","authors":"Dheseviano Emiaso, Gloria Ogochukwu Okafor","doi":"10.11648/j.jfa.20231103.16","DOIUrl":"https://doi.org/10.11648/j.jfa.20231103.16","url":null,"abstract":"","PeriodicalId":39488,"journal":{"name":"Afro-Asian Journal of Finance and Accounting","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-06-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84244004","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-06-27DOI: 10.11648/j.jfa.20231103.17
Hussen Abdulkadir Roba, Habtamu Alebachew Legass
: Commercial banks are the most important depository organizations that provide loan and advance in developing country. The objective of this study was to provide empirical evidence on determinants of banks’ loan and advances in Ethiopia. Fixed effect balanced panel regression was used for the data of ten purposively chosen commercial banks over the period of 12 years (2010 to 2021). To realize the stated objective quantitative approach and explanatory design were employed using secondary data sources from the audited financial statement. Consequently bank specific, industry specific and macro-economic variable that affect banks’ loan were selected and analyzed by using E-view 10 econometrics software. According to the findings, capital adequacy, liquidity ratio, bank size, and foreign exchange rate all have a positive and statistically significant impact on bank loans. Profitability ratios, cash reserve ratios
{"title":"Factors Determining Banks’ Loan and Advance: A Case Study on Commercial Banks in Ethiopia","authors":"Hussen Abdulkadir Roba, Habtamu Alebachew Legass","doi":"10.11648/j.jfa.20231103.17","DOIUrl":"https://doi.org/10.11648/j.jfa.20231103.17","url":null,"abstract":": Commercial banks are the most important depository organizations that provide loan and advance in developing country. The objective of this study was to provide empirical evidence on determinants of banks’ loan and advances in Ethiopia. Fixed effect balanced panel regression was used for the data of ten purposively chosen commercial banks over the period of 12 years (2010 to 2021). To realize the stated objective quantitative approach and explanatory design were employed using secondary data sources from the audited financial statement. Consequently bank specific, industry specific and macro-economic variable that affect banks’ loan were selected and analyzed by using E-view 10 econometrics software. According to the findings, capital adequacy, liquidity ratio, bank size, and foreign exchange rate all have a positive and statistically significant impact on bank loans. Profitability ratios, cash reserve ratios","PeriodicalId":39488,"journal":{"name":"Afro-Asian Journal of Finance and Accounting","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-06-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"88346009","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-06-27DOI: 10.11648/j.jfa.20231103.15
Gilberto Crispim, Marcus Craig Rodrigs, L. Alberton
{"title":"An Investigation About Political Budget Cycle in the Electoral Period in American Countries","authors":"Gilberto Crispim, Marcus Craig Rodrigs, L. Alberton","doi":"10.11648/j.jfa.20231103.15","DOIUrl":"https://doi.org/10.11648/j.jfa.20231103.15","url":null,"abstract":"","PeriodicalId":39488,"journal":{"name":"Afro-Asian Journal of Finance and Accounting","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-06-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"83331515","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The insurance sector is an essential component for the continued expansion and prosperity of the economy. It is the responsibility of the insurance industry to secure the continued existence of enterprises, to disperse the risk that is caused by financial losses, and to work toward eradicating uncertainty in the minds of investors. Despite the important role of the insurance sector in the economy, firms operating in this sector have been having trouble maintaining their financial stability. The insurance sector has faced considerable volatility in profitability, resulting in some firms being placed under receivership or even going out of firm. The purpose of this study was to analyse the effect of loss ratio on financial stability of insurance firms in Kenya. The study was anchored on the Theory of Distress by Wreckers. The research was conducted using an explanatory research design, and the positivist philosophical approach was utilized. The target population for this study consisted of the 46 insurance firms that held IRA licenses and were operating during the time period under consideration (2014-2021). The census method was utilized for the research thesis, which focused on all 46 insurance firms in Kenya. The study used secondary data obtained from audited financial statements, which were publicly available on the websites of individual insurance firms. To gather panel data for the study, a secondary data collection template was employed. In order to draw conclusions from the data that was gathered, this study employed both descriptive and inferential statistical methods. The study employed a generalized method of moments modelling guided by static panel regression. The data processing was done using the Stata software. The research findings were presented through the use of tables and trend line graphs. The study adhered to research ethics guidelines. The findings of this study showed that loss ratio had a significant negative influence on the financial stability of Kenyan insurance companies (β = -0.5795373, p = 0.002 < .05).The study concludes that loss ratios and capital adequacy plays a significant role in the financial stability of insurance firms. A lower loss ratio indicates a more efficient underwriting process and risk management, contributing to better financial performance and stability. As a result, the study recommends that to enhance their financial stability, general insurers in Kenya should manage their loss ratio. It's also recommended that Kenya should adhere to the principles of the Solvency II framework. Keywords: Loss Ratio, Insurance Firms, Claims Management, Financial Stability, Kenya
保险业是经济持续扩张和繁荣的重要组成部分。保险行业有责任确保企业的持续生存，分散由财务损失引起的风险，并努力消除投资者心中的不确定性。尽管保险业在经济中发挥着重要作用，但在这一领域经营的公司一直难以维持其财务稳定性。保险业在盈利能力方面面临着相当大的波动，导致一些公司被置于破产管理之下，甚至倒闭。本研究的目的是分析损失率对肯尼亚保险公司财务稳定性的影响。这项研究的基础是“破坏者的痛苦理论”。本研究采用解释性研究设计，并运用实证哲学方法。本研究的目标人群包括46家持有IRA许可证并在考虑的时间段(2014-2021年)运营的保险公司。普查方法被用于研究论文，其重点是在肯尼亚所有46家保险公司。这项研究使用了从经审计的财务报表中获得的二手数据，这些财务报表可以在各个保险公司的网站上公开获得。为了收集研究的面板数据，采用了二次数据收集模板。为了从收集到的数据中得出结论，本研究采用了描述性和推断性统计方法。本研究采用静态面板回归指导下的广义矩建模方法。数据处理采用Stata软件进行。研究结果是通过使用表格和趋势线图来呈现的。这项研究遵循了研究伦理准则。本研究结果表明，损失率对肯尼亚保险公司的财务稳定性有显著的负向影响(β = -0.5795373, p = 0.002 < 0.05)。研究表明，损失率和资本充足率对保险公司的财务稳定性起着重要作用。较低的损失率表明更有效的承保流程和风险管理，有助于更好的财务业绩和稳定性。因此，该研究建议，为了增强其财务稳定性，肯尼亚的一般保险公司应该管理其损失率。它还建议肯尼亚应遵守偿付能力II框架的原则。关键词:损失率，保险公司，理赔管理，金融稳定，肯尼亚
{"title":"The Impact of Loss Ratio on the Financial Stability of Insurance Firms in Kenya","authors":"Bonface Mugo Ritho","doi":"10.53819/81018102t4161","DOIUrl":"https://doi.org/10.53819/81018102t4161","url":null,"abstract":"The insurance sector is an essential component for the continued expansion and prosperity of the economy. It is the responsibility of the insurance industry to secure the continued existence of enterprises, to disperse the risk that is caused by financial losses, and to work toward eradicating uncertainty in the minds of investors. Despite the important role of the insurance sector in the economy, firms operating in this sector have been having trouble maintaining their financial stability. The insurance sector has faced considerable volatility in profitability, resulting in some firms being placed under receivership or even going out of firm. The purpose of this study was to analyse the effect of loss ratio on financial stability of insurance firms in Kenya. The study was anchored on the Theory of Distress by Wreckers. The research was conducted using an explanatory research design, and the positivist philosophical approach was utilized. The target population for this study consisted of the 46 insurance firms that held IRA licenses and were operating during the time period under consideration (2014-2021). The census method was utilized for the research thesis, which focused on all 46 insurance firms in Kenya. The study used secondary data obtained from audited financial statements, which were publicly available on the websites of individual insurance firms. To gather panel data for the study, a secondary data collection template was employed. In order to draw conclusions from the data that was gathered, this study employed both descriptive and inferential statistical methods. The study employed a generalized method of moments modelling guided by static panel regression. The data processing was done using the Stata software. The research findings were presented through the use of tables and trend line graphs. The study adhered to research ethics guidelines. The findings of this study showed that loss ratio had a significant negative influence on the financial stability of Kenyan insurance companies (β = -0.5795373, p = 0.002 < .05).The study concludes that loss ratios and capital adequacy plays a significant role in the financial stability of insurance firms. A lower loss ratio indicates a more efficient underwriting process and risk management, contributing to better financial performance and stability. As a result, the study recommends that to enhance their financial stability, general insurers in Kenya should manage their loss ratio. It's also recommended that Kenya should adhere to the principles of the Solvency II framework. Keywords: Loss Ratio, Insurance Firms, Claims Management, Financial Stability, Kenya","PeriodicalId":39488,"journal":{"name":"Afro-Asian Journal of Finance and Accounting","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-06-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"80149398","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
京公网安备 11010802042870号
京ICP备2023020795号-1
扫码关注我们
求助内容：
应助结果提醒方式：