The global business environment is undergoing significant changes marked by intense competition, and the banking industry is no exception. In response to these dynamics, commercial banks are increasingly embracing innovation, with agency banking emerging as a notable addition. This study explores the determinants of financial performance in agency banking in Kenya. The theoretical framework guiding this investigation incorporates agency theory and competitive advantage theory. The study identifies key influencers of agency banking performance, such as financial service accessibility, transaction costs, market share, and compliance with Central Bank regulations. Financial service accessibility is crucial in fostering financial inclusion, especially in rural areas, and has positively impacted deposit levels. Transaction costs have significantly decreased, enhancing the viability of small-scale transactions and serving the previously unbanked. Market share is explored as a determinant of profitability, with a larger market share providing institutions more control over services and pricing. The study also emphasizes the role of Central Bank regulations in ensuring the safety of financial transactions conducted through agency banking. This study aims to contribute to the understanding of the determinants of financial performance in agency banking in Kenya, offering insights that can inform strategic decision-making in the dynamic landscape of modern banking.
{"title":"Relationship between Financial Services, Central Bank Regulations and Agency Banking Performance in Kenya","authors":"Mackline Kerubo Mongare","doi":"10.59413/ajocs/v3.i3.6","DOIUrl":"https://doi.org/10.59413/ajocs/v3.i3.6","url":null,"abstract":"The global business environment is undergoing significant changes marked by intense competition, and the banking industry is no exception. In response to these dynamics, commercial banks are increasingly embracing innovation, with agency banking emerging as a notable addition. This study explores the determinants of financial performance in agency banking in Kenya. The theoretical framework guiding this investigation incorporates agency theory and competitive advantage theory. The study identifies key influencers of agency banking performance, such as financial service accessibility, transaction costs, market share, and compliance with Central Bank regulations. Financial service accessibility is crucial in fostering financial inclusion, especially in rural areas, and has positively impacted deposit levels. Transaction costs have significantly decreased, enhancing the viability of small-scale transactions and serving the previously unbanked. Market share is explored as a determinant of profitability, with a larger market share providing institutions more control over services and pricing. The study also emphasizes the role of Central Bank regulations in ensuring the safety of financial transactions conducted through agency banking. This study aims to contribute to the understanding of the determinants of financial performance in agency banking in Kenya, offering insights that can inform strategic decision-making in the dynamic landscape of modern banking.","PeriodicalId":396950,"journal":{"name":"African Journal of Commercial Studies","volume":"8 7","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-11-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139238064","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}
Manufacturing companies, integral to a nation's economic fabric, wield significant influence on financial prosperity. This article explores the imperative of nurturing these entities with the utmost care to ensure optimal financial performance. The paper discusses the significance of budgeting, planning, and control in enhancing the financial performance of manufacturing companies, particularly in developing countries. Budgeting involves creating spending plans to ensure effective use of resources, and it has been successful in countries like Kenya, India, and Somalia. Four theories related to budgeting, planning, and control in manufacturing companies are outlined in the study: organizational theory, stakeholders' theory, contingency’ theory, and goal-setting theory. The study observed that manufacturing companies significantly contribute to national economies through their export-driven models, facilitated by prudent budgeting, robust internal controls, and proactive risk planning. Budgeting stands as a fundamental tool for resource allocation, encompassing stages from planning to periodic evaluation. Risk planning emerges as a proactive shield against potential losses, considering both probability and impact. By harmonizing budgeting, internal control, and risk planning, manufacturing companies not only fortify their financial standing but also augment the economic vitality of their respective nations. In conclusion, the article presents a holistic perspective on the interconnected strategies of budgeting, internal control, and risk planning in bolstering the financial standing of manufacturing enterprises.
{"title":"Budgeting, Risk Planning, Internal Control and Financial Performance of Kenyan Manufacturing Firms","authors":"Olivia Pendo Baya","doi":"10.59413/ajocs/v3.i3.5","DOIUrl":"https://doi.org/10.59413/ajocs/v3.i3.5","url":null,"abstract":"Manufacturing companies, integral to a nation's economic fabric, wield significant influence on financial prosperity. This article explores the imperative of nurturing these entities with the utmost care to ensure optimal financial performance. The paper discusses the significance of budgeting, planning, and control in enhancing the financial performance of manufacturing companies, particularly in developing countries. Budgeting involves creating spending plans to ensure effective use of resources, and it has been successful in countries like Kenya, India, and Somalia. Four theories related to budgeting, planning, and control in manufacturing companies are outlined in the study: organizational theory, stakeholders' theory, contingency’ theory, and goal-setting theory. The study observed that manufacturing companies significantly contribute to national economies through their export-driven models, facilitated by prudent budgeting, robust internal controls, and proactive risk planning. Budgeting stands as a fundamental tool for resource allocation, encompassing stages from planning to periodic evaluation. Risk planning emerges as a proactive shield against potential losses, considering both probability and impact. By harmonizing budgeting, internal control, and risk planning, manufacturing companies not only fortify their financial standing but also augment the economic vitality of their respective nations. In conclusion, the article presents a holistic perspective on the interconnected strategies of budgeting, internal control, and risk planning in bolstering the financial standing of manufacturing enterprises.","PeriodicalId":396950,"journal":{"name":"African Journal of Commercial Studies","volume":"34 8","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-11-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139261617","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}
Most businesses have underperformed due to the ever-changing environmental forces that affect the operation of commercial enterprises. Strong internal control systems are necessary for the institutions to implement sound revenue collection practices. Regarding the link between internal control systems and revenue generation, actual research in this area is scarce. The main objective of this research was to determine the effects of internal control components on revenue generation in Kenyan companies. The specific objectives focused on the effects of control environments, risk assessment, and control activities in Kenya. Agency theory and stewardship theory will serve as the study’s foundation. The study engaged in a literature review approach to find out whether there is a direct relationship between the internal control components and revenue generation. The study reached the conclusion that budgets heavily rely on revenue collection, which is essential to financial management. According to the report, management should continuously improve internal control procedures to keep the system current with expanding operational capability, regular internal training, and employee development.
{"title":"Effects of Internal Control Components on Revenue Generation among Corporations in Kenya","authors":"Gabriel Muchoki Mutua","doi":"10.59413/ajocs/v2.i1.1","DOIUrl":"https://doi.org/10.59413/ajocs/v2.i1.1","url":null,"abstract":"Most businesses have underperformed due to the ever-changing environmental forces that affect the operation of commercial enterprises. Strong internal control systems are necessary for the institutions to implement sound revenue collection practices. Regarding the link between internal control systems and revenue generation, actual research in this area is scarce. The main objective of this research was to determine the effects of internal control components on revenue generation in Kenyan companies. The specific objectives focused on the effects of control environments, risk assessment, and control activities in Kenya. Agency theory and stewardship theory will serve as the study’s foundation. The study engaged in a literature review approach to find out whether there is a direct relationship between the internal control components and revenue generation. The study reached the conclusion that budgets heavily rely on revenue collection, which is essential to financial management. According to the report, management should continuously improve internal control procedures to keep the system current with expanding operational capability, regular internal training, and employee development.","PeriodicalId":396950,"journal":{"name":"African Journal of Commercial Studies","volume":"242 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-10-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139315807","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 internal auditor's job is to independently vouch for the efficiency of the organization's risk management, governance, and internal control systems. The purpose of this study was to ascertain the effects of risk assessment, financial statement audits, and internal auditor evaluations of controls on financial performance. This essay began by outlining the function of internal audit. An empirical study of the literature is then conducted with regard to financial performance and reviews of internal controls, financial statements, and risk management. The study found that there is evidence in the literature linking financial success and internal auditor functions.
{"title":"Internal Auditor’s Role and Corporate Financial Performance in Kenya","authors":"Aisah Midecha","doi":"10.59413/ajocs/v1.i1.5","DOIUrl":"https://doi.org/10.59413/ajocs/v1.i1.5","url":null,"abstract":"The internal auditor's job is to independently vouch for the efficiency of the organization's risk management, governance, and internal control systems. The purpose of this study was to ascertain the effects of risk assessment, financial statement audits, and internal auditor evaluations of controls on financial performance. This essay began by outlining the function of internal audit. An empirical study of the literature is then conducted with regard to financial performance and reviews of internal controls, financial statements, and risk management. The study found that there is evidence in the literature linking financial success and internal auditor functions.","PeriodicalId":396950,"journal":{"name":"African Journal of Commercial Studies","volume":"99 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-10-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139315729","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 focus of this study is to examine the correlation between the caliber of internal audit reports and the precision of financial reporting within Kenyan savings and credit cooperative societies (SACCOs). The accuracy of financial reporting is of paramount importance as it influences investment decisions and market efficacy. In view of SACCOs' limited accounting expertise, this investigation aims to evaluate the impact of adept internal auditors on financial accuracy and the internal audit function's role in enhancing controls and preventing fraud. The study utilizes agency and stakeholder theories to probe into the SACCO management-shareholder relationship. By highlighting the significance of accurate financial statements and internal audit quality, the study employs theoretical frameworks to analyze the impact of audit reporting quality on financial accuracy. The ultimate objective of this study is to augment our comprehension of the role of internal audit quality in enhancing financial accuracy in Kenyan SACCOs. The theoretical basis of agency and stakeholder theories facilitates the analysis of intricate SACCO dynamics. In light of the criticality of SACCOs in Kenya's financial sector, the insights derived from this study support governance strengthening and the promotion of accurate financial reporting.
{"title":"Internal Audit Report Quality and Financial Statement Accuracy of Savings and Credit Cooperatives Societies in Kenya","authors":"Bancy Kagiri","doi":"10.59413/ajocs/v3.i1.5","DOIUrl":"https://doi.org/10.59413/ajocs/v3.i1.5","url":null,"abstract":"The focus of this study is to examine the correlation between the caliber of internal audit reports and the precision of financial reporting within Kenyan savings and credit cooperative societies (SACCOs). The accuracy of financial reporting is of paramount importance as it influences investment decisions and market efficacy. In view of SACCOs' limited accounting expertise, this investigation aims to evaluate the impact of adept internal auditors on financial accuracy and the internal audit function's role in enhancing controls and preventing fraud. The study utilizes agency and stakeholder theories to probe into the SACCO management-shareholder relationship. By highlighting the significance of accurate financial statements and internal audit quality, the study employs theoretical frameworks to analyze the impact of audit reporting quality on financial accuracy. The ultimate objective of this study is to augment our comprehension of the role of internal audit quality in enhancing financial accuracy in Kenyan SACCOs. The theoretical basis of agency and stakeholder theories facilitates the analysis of intricate SACCO dynamics. In light of the criticality of SACCOs in Kenya's financial sector, the insights derived from this study support governance strengthening and the promotion of accurate financial reporting.","PeriodicalId":396950,"journal":{"name":"African Journal of Commercial Studies","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130338574","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}
Small and medium-scale enterprises (SMEs) are entities of utmost importance in the economic development of a country, as they not only generate job opportunities but also provide goods and services to meet basic human needs. Microfinance institutions (MFIs) are purveyors of financial services such as microcredit, micro savings, and microinsurance, which empower low-income individuals and SMEs to achieve their financial goals. The present study delves into the effects of these microfinance services on the profitability of SMEs in Kenya. The existing empirical literature has shown a significant positive correlation between the utilization of microfinance services and the profitability of SMEs. However, it is imperative to note that gaps exist, including the dearth of localized studies focusing on SMEs in Kenya and the need for more robust methodologies to establish causal relationships. To conclude, SMEs in Kenya can undoubtedly benefit from microfinance services to enhance their profitability. Although existing literature provides valuable insights into this relationship, further research is warranted to address methodological limitations and contextual factors specific to the Kenyan SME landscape.
{"title":"A Review of the Effect of Microfinance Services on the Profitability of SMES in Kenya","authors":"Morgan Wanjala Wasike","doi":"10.59413/ajocs/v3.i1.4","DOIUrl":"https://doi.org/10.59413/ajocs/v3.i1.4","url":null,"abstract":"Small and medium-scale enterprises (SMEs) are entities of utmost importance in the economic development of a country, as they not only generate job opportunities but also provide goods and services to meet basic human needs. Microfinance institutions (MFIs) are purveyors of financial services such as microcredit, micro savings, and microinsurance, which empower low-income individuals and SMEs to achieve their financial goals. The present study delves into the effects of these microfinance services on the profitability of SMEs in Kenya. The existing empirical literature has shown a significant positive correlation between the utilization of microfinance services and the profitability of SMEs. However, it is imperative to note that gaps exist, including the dearth of localized studies focusing on SMEs in Kenya and the need for more robust methodologies to establish causal relationships. To conclude, SMEs in Kenya can undoubtedly benefit from microfinance services to enhance their profitability. Although existing literature provides valuable insights into this relationship, further research is warranted to address methodological limitations and contextual factors specific to the Kenyan SME landscape.","PeriodicalId":396950,"journal":{"name":"African Journal of Commercial Studies","volume":"55 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-08-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121103704","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}
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