African Development Finance Journal (ADFJ) is a high quality open access peer reviewed research journal that is published by Department of Finance and Accounting, University of Nairobi. African Development Finance Journal (ADFJ) is published bimonthly and provides a platform for the researchers, academicians, professionals, practitioners and students to impart and share knowledge.
Department of Finance and Accounting, University of Nairobi
Market Information Risk, Trading Activity and Organizational Characteristics: Combined influence on Price Discovery for Stocks Listed at the Nairobi Securities Exchange
Abstract This study sought to determine the combined influence of Market Information Risk, Trading Activity and Organizational Characteristics on Price discovery for stocks listed at the Nairobi Securities Exchange. Besides being one of the yardsticks for assessing the quality of financial decisions by management in the maximization of shareholders wealth, stock markets around the world provide unparalleled investment destinations for investors. Consequently, the structure and design of a financial market for stocks must continuously attempt to discover efficient market clearing prices. Price discovery for financial instruments trading in an exchange remains a widely debated issue in the discipline of finance because of its implications for risk management, portfolio construction, capital formation, preservation and allocation, and promotion of societal welfare. This study was guided by Market Microstructure Theory and specifically information-based models and descriptive research design. The study population was based on all sixty companies whose stocks trade at the Nairobi Securities Exchange for a period of six months using 60-minute intraday data during the continuous trading period. The hypothesis that was tested stated that there is no significant joint effect relationship of market information risk, trading activity and organizational characteristics on price discovery using a stepwise regression analysis. In establishing joint effect Bid-ask spread, trading volume, number of transactions, stock return volatility and ownership concentration were investigated individually and jointly. The results showed significant independent effects of market information risk, trading activity, organizational characteristics on price discovery and further it was established that the joint effect had a higher significance as compared to individual effects thus supporting the hypothesis. Based on the results of this study, the government, through Capital Markets Authority and other stakeholders, should develop appropriate policies in an attempt to design the securities market to enable market participants ease of access to information, enhance information content of stock, liquidity and improve the process of price formation. Keywords: Market Microstructure, Trading Activity, Market Information Risk, Price Discovery, Stocks Listed at NSE, Intraday Regularities.
Copyright (c) 2026 African Development Finance Journal
Effect of Investor Psychology of Fund Managers on Portfolio Performance of the Investments Firms in Kenya
Abstract This paper examines the effect of investor psychology of fund managers on the performance of the portfolios they manage. The study established that fund managers were influenced by risk aversion, overconfidence, herding behavior, risk aversion and greed in their investment decisions. The effect on portfolio performance was found to be positive and significant. The fund managers were found to be more prone to risk aversion and least prone to greed. Based on the findings, there is need for the enhancement of portfolio performance through aligning investor psychology traits with effective strategies. The effect of risk aversion suggests that cautious investors who weigh potential losses carefully are still able to achieve strong portfolio performance, potentially through balanced, well-diversified portfolios that manage downside risk. In terms of herding behavior, it depicts that popular investment trends can yield favorable results, though it also highlights the importance of monitoring market dynamics to avoid groupthink risks. The influence of over-confidence bias also implies that investors who trust their judgment and knowledge are likely to make bold investment choices, potentially leading to higher returns. Lastly, the influence of greed highlights that the desire for higher returns can drive effective portfolio growth, though it also points to the need for safeguards against excessive risk-taking. Our findings underscore the importance of understanding and managing investor psychology within portfolio management to balance risk with return, thereby optimizing performance. Keywords: Investor psychology, portfolio performance, risk, return, Efficient market hypothesis.
Does Mobile based Lending affect Loan Performance? Evidence from Commercial Banks in Kenya
Abstract The push for financial inclusivity has led to the introduction of digital lending by financial institutions. Some of popular digital lending channels include Mshwari by NCBA bank, KCB-Mpesa by Kenya commercial bank, Pesa-pap by Family bank and Timiza by Absa bank. Since the introduction of Mpesa services in Kenya in 2012, there has been an increase in delinquency. The foremost aims of this review were to examine the impact loan appraisal process, cost of loans, loan disbursements and loan repayment period on loan performance of Kenyan banks. Technology acceptance theory, financial intermediation preposition and information asymmetry theory guided this analysis. The research philosophy of positivism, which emphasizes objective measurement and observation to acquire knowledge was adopted in this analysis. The study examined a population of 38 commercial banks operating in Kenya by year 2023 using a descriptive research approach. A purposive sampling method was employed to acquire a sample size of 76. Questionnaires are employed to collect primary data. The analysis mainly targeted credit staff working for the various commercial institutions. Descriptive statistics such as measure of central tendency (mainly mean) and variability (express by statistical dispersion) were used to analyze the data. Inferential statistics such as regression and hypothesis testing were used to show the relationship between mobile-based lending and loan performance of commercial banks in Kenya. The findings demonstrated that loan appraisal process, cost of loan, loan disbursement, and loan repayment period have a Substantial impact on loan performance of Kenyan banks. The study highlighted that proper loan appraisal, low cost of loans, managing disbursements and favorable repayment term will help improve loan performance. The analysis on mobile based lending and loan performance of Kenyan banks has contributed to theory, policy and practice. It enhances theoretical understanding of the relationship between mobile based loans and loan performance through insights into how technology has eased lending process and enhanced financial inclusivity. In practice, the study has given guidance to lenders on how various factors of mobile lending have influenced loan performance. The study has implications for policy formulation, as technology is being embraced by commercial banks, and drive for financial inclusivity there is need to maintain a sound lending process that protects investors and other stakeholders. The policies should ensure they offer an enabling environment for financial innovation and still ensure loan performance. Keywords: Mobile based lending, Loan appraisal process, Cost of loan, Loan disbursement, Loan repayment term, and non-performing loans.
Credit Risk Management, Firm Age and Financial Performance: Evidence from Commercial Banks in Kenya
This study examined the effect of credit risk management on financial performance of commercial banks in Kenya and tested whether firm age moderates this relationship. Using secondary panel data for 42 commercial banks over the period 2013–2022, credit risk management was captured using indicators such as delinquency rate, value at risk, and distance to default, while financial performance was assessed using standard bank performance metrics. Panel regression analysis was employed to estimate the direct effect of credit risk management on financial performance and the interaction effect between credit risk management and firm age. The results show that credit risk management significantly influences financial performance; however, firm age does not significantly moderate the relationship between credit risk management and financial performance among commercial banks in Kenya. Based on the findings, the study concludes that effective credit risk management remains a critical determinant of financial performance in commercial banks, regardless of their age. The absence of a significant moderation effect implies that both young and mature banks benefit similarly from sound credit risk practices. The study recommends that bank managers consistently strengthen credit appraisal, monitoring, and recovery mechanisms, while policymakers and regulators should continue enforcing robust credit risk management frameworks across the banking sector without differentiating requirements based on firm age. Keywords: Credit risk management, financial performance, delinquency rate, value at risk, distance to default, and firm age.
Government Funding, Institutional Size, and Student Enrolment in Public TVET Institutions: Evidence from Nairobi Metropolitan, Kenya
This article examines the influence of government funding, specifically Higher Education Loans Board (HELB) loans and capitation, on student enrolment in public Technical and Vocational Education and Training (TVET) institutions in Nairobi Metropolitan, Kenya. Using longitudinal panel data from 2019–2023 across 12 institutions, the study analyzes how institutional size moderates the relationship between funding and enrolment. Results show that HELB, capitation, and institutional size jointly explain 66.9% of the variance in enrolment rates, with all predictors exerting significant positive effects. Larger institutions benefit disproportionately due to economies of scale and stronger absorptive capacity. The findings highlight the centrality of coordinated demand- and supply-side financing models in promoting equitable access to technical education. Policy recommendations include strengthening funding frameworks, expanding capacity in smaller TVETs, and improving administrative efficiency to maximize the impact of public financing. Keywords: Government Funding, Institutional Size, Student Enrolment, Public Institutions
Copyright (c) 2025 African Development Finance Journal
Fiscal Framework and Economic Growth of East African Member Countries
This study examined the relationship between public debt and economic growth in EAC member states. Using a longitudinal research design and secondary data from Kenya, Uganda, Tanzania, Burundi, and Rwanda. The research uses data collected from 2014 to 2023 for countries that were members of the EAC block by the year 2023. The analysis applied the Arellano-Bover System Generalized Method of Moments (GMM) to address endogeneity and dynamic panel concerns. To ensure reliability, diagnostic tests such as the Breusch-Pagan test for heteroscedasticity, the Hausman test, and the Arellano-Bond test for serial correlation were conducted, with results evaluated at the 5% significance level. The findings show that government expenditure has a positive but statistically insignificant effect on economic growth, reflecting the limited impact of recurrent-heavy spending on productivity, tax revenue has a negative and significant effect, suggesting that high tax rates coupled with a narrow tax base reduce private investment and household consumption and also that public debt has mixed outcomes: domestic debt had a positive though insignificant effect on growth, while external debt negatively and significantly influenced growth due to high servicing costs and currency risks. Keywords: Government Expenditure, Tax Revenue, Public Debt, Economic Growth
Agri-Insurance Financing and the Resilience of Smallholder Farmers in Nakuru County, Kenya
Agricultural insurance has increasingly become a critical tool for stabilizing smallholder farmers’ livelihoods, particularly in regions affected by climate variability and market shocks. This paper examines the influence of Agri-insurance financing on the productivity and resilience of smallholder farmers in Nakuru County. Using a descriptive quantitative design and data from 272 respondents, findings show that insurance significantly enhances productivity (β = .258, p < .001) by reducing farmers’ risk exposure, strengthening investment confidence, and promoting adoption of new technologies. Despite high awareness levels, insurance uptake remains low due to unaffordable premiums, low trust in insurers, and limited experience with claim processing. The study recommends subsidized index-based insurance, bundling insurance with credit and inputs, digital claim-processing mechanisms, and cooperative-based outreach. Keywords: Agri-Insurance, Smallholder Farmers, Productivity, Risk Management, Kenya
Agricultural Value Chain Financing and Smallholder Farmers’ Productivity in Nakuru County, Kenya
Agricultural Value Chain Financing (AVCF) has emerged as a critical pathway for improving the productivity and resilience of smallholder farmers across developing economies. This study examines the influence of AVCF on the productivity of smallholder farmers in Nakuru County, Kenya. Using a descriptive quantitative design and data from 272 farmers, the study demonstrates that AVCF significantly contributes to improved input accessibility, strengthened market linkages, and enhanced farmer profitability. Regression analysis confirms a positive and statistically significant relationship between AVCF and productivity (β = .166, p = .005). Despite the benefits, participation remains limited due to capacity gaps, information asymmetry, and weak extension systems. The study recommends strengthening contract farming, digitizing value chain platforms, enhancing extension services, and promoting farmer aggregation to unlock the full benefits of AVCF. Keywords: Agricultural Value Chain Financing, Productivity, Smallholder Farmers, Market Access, Kenya
Agricultural Credit Cooperatives and Warehouse Receipt Financing as Drivers of Smallholder Productivity in Nakuru County
This study examines the influence of Agricultural Credit Cooperatives (ACCs) and Warehouse Receipt Financing (WRF) on smallholder farmers’ productivity in Nakuru County. Drawing on data from 272 farmers, findings show that both ACCs (β = .211, p < .001) and WRF (β = .265, p < .001) significantly enhance productivity by increasing access to affordable credit, enabling timely input acquisition, reducing distress selling, and stabilizing market participation. Descriptive results reveal strong reliance on cooperatives but limited access to certified warehouses. The study recommends strengthening cooperative governance, expanding rural warehouse infrastructure, digitizing warehouse receipts, and integrating WRF into national food reserve systems. Keywords: Credit Cooperatives, Warehouse Receipt Financing, Productivity, Collateral Financing, Kenya
Investment Decisions and Profitability of Manufacturing and Allied Firms Listed at the Nairobi Securities Exchange
The current economic environment in Kenya presents a number of challenges, such as rising production costs, fluctuating exchange rates, high taxation, a decline in profitability, inflationary pressures, and increased competition both locally and globally, that necessitate sound decision-making for optimal performance by most firms. Companies in the country have undertaken the task of evaluating and reorganizing their investment strategies with the aim of enhancing growth and profitability. Manufacturing is one of the sectors being confronted by this scenario. This sector is important in Kenya as it contributes significantly to the country's social and economic development. Since 2010, Kenya's manufacturing sector has contributed around 15 percent to the GDP in the economy and nearly 300,000 employees, accounting for 13 percent of total national employment. However, there has been noted a decline in the performance of the manufacturing sector. Between the year 2016 and 2024, the sector has experienced an average fall of 0.2 percent in the Return on Assets. The sector has also reported a decline in revenue earnings in relative to their total assets over the same period. However, as this is being observed, the sector has also reported expansions and replacements whose main goal is to improve profitability. Therefore, this study investigated the investment decisions based on expansions and renewals, and profitability of manufacturing and allied firms listed at the NSE. Specific objectives included the effect of expansion, replacement, and renewal decisions, on the profitability of manufacturing and allied firms listed at the Nairobi Stock Exchange. The study was grounded on profit maximization theory, agency and signaling theory to adopt the profit maximization model. Panel secondary data was used in the analysis of the audited financial statements of all the nine listed enterprises covering the period 2016 to 2024 to enhance a comprehensive analysis of the entire population. Data was analyzed using panel regression with model selection guided by the Haussmann test, alongside diagnostic checks to ensure robustness. The study generated empirical evidence on investment decisions and profitability, hence offering insights for managers and policy implications for sectoral growth. The study reveals that replacement and expansion investments negatively and significantly affect profitability, while renewal investments has a positive but insignificant effect. This points to the need of these firms consolidating their productions while developing distribution points to improve on their profitability. In addition, the firms may consider replacing the investments with more advanced technology to save on cost that affects performance negatively. Keywords: Performance, Replacement, Renewal, Expansion
Interest Rates and Housing Finance in Tanzania
assessing how monetary policy changes influence access to affordable mortgages. The study investigates the persistent divergence between the Central Bank Rate (CBR) and commercial mortgage lending rates, exploring the underlying structural and institutional factors that weaken monetary policy transmission. Guided by economic theories of interest rate behavior, including Wicksell’s Natural Rate of Interest and Keynes’ Liquidity Preference, the analysis draws on data from the Bank of Tanzania (BoT), the World Bank’s Tanzania Housing Finance Project, and additional scholarly sources. Despite the reduction of the CBR to 5.75% in July 2025, mortgage rates remain high at 15–18%, limiting credit accessibility and slowing housing sector development. The findings reveal that constraints such as limited long-term financing, an underdeveloped secondary mortgage market, and inefficiencies in land titling continue to impede housing affordability. The study concludes that interest rate reductions alone are insufficient to expand mortgage access without broader reforms in refinancing mechanisms, land governance, and financial literacy. Recommended policy interventions include strengthening the Tanzania Mortgage Refinance Company (TMRC), deepening secondary mortgage markets, and introducing targeted interest subsidies for affordable housing. Keywords: Interest rates, Housing Finance, Mortgage Lending, Central Bank Rate, Housing Affordability
Influence of Financial Literacy on SME Performance in Gatundu South Constituency, Kiambu County, Kenya
The study sought to assess the influence of financial literacy on the performance of SMEs by examining budgeting and bookkeeping literacy in Gatundu South Constituency, Kiambu County, Kenya. The study utilized descriptive research design and assumed a random sampling technique to identify a sample of 130 SMEs. Purposive sampling was used to identify the respondents. A questionnaire was used as the primary data collection tool. The research utilized descriptive analysis and multiple regression model to analyze the relationship between financial literacy and financial performance. The findings indicated that there was consistency with prior empirical literature thus recommending that every business owner should strive at acquiring financial literacy skills to reap the benefits of better and improved financial performance. Persons of goodwill such as the government and financial institutions should aim at offering trainings to business owners since their success contributes to the greater good of the country and beyond. Keywords: Financial Literacy, Financial Performance, Small and Medium Enterprises
Does Financial Attributes Matter? An Empirical Assessment of Liquidity, Dividend Decisions, and Firm Size on Value of Firms Listed at the Nairobi Securities Exchange
This study explores the combined effects of firm liquidity, dividend policy, and firm size on the value of firms listed on the Nairobi Securities Exchange. It posits that firm value is crucial in finance, as it results from various corporate decisions, including investment, risk management, and profitability, alongside financing choices like liquidity management and dividend policy. Earlier theories emphasized that investment decisions primarily influence firm valuation; however, empirical studies underscore the significance of liquidity, dividend policy, and firm size, particularly in emerging markets characterized by information asymmetry and financing constraints. The study utilizes cash conversion cycle, dividend signaling, and agency theories to create a conceptual framework analyzing how these factors collectively affect firm value, quantified using Tobin’s Q. Adopting a positivist research philosophy and a descriptive longitudinal design, the study analyzed secondary financial data from all 63 NSE-listed firms from 2008 to 2022, yielding 765 observations. Firm liquidity was measured through short-term liquidity, asset convertibility, and new debt capacity; dividend policy was assessed via payout ratios and dividend yield; and firm size was defined in terms of total assets and employee count. The findings revealed that liquidity positively significantly impacts firm value, marking its crucial role in enhancing market perceptions. Conversely, dividend policy and firm size were analyzed as independent variables to determine their effects on firm value. The study concludes that liquidity is the main factor influencing firm value, whereas dividend policy and firm size also have a positive impact on the model’s explanatory power. The results suggest that larger firms and those with well-defined dividend policies can enhance their valuation, thereby underscoring the significance of cohesive management strategies aimed at boosting firm value, particularly in emerging markets. Keywords: Firm Value Liquidity Dividend Policy Firm Size Tobin’s Q
Credit Risk Management and Financial Performance of Deposit Money Banks in Nigeria
This study sought to empirically examine the relationship between credit risk management and the financial performance of deposit money banks in Nigeria over a nine-year period (2009–2017). This study was motivated by the recognition that credit risk is one of the most critical exposures influencing the performance and sustainability of banks worldwide, and failure to effectively manage it can result in severe financial distress. Descriptive statistics and correlation analysis were employed to examine the characteristics of the variables, while panel data econometric techniques were applied for the main analysis. The fixed-effect results revealed that non-performing loans and bank size exert a significant negative impact on the financial performance of Nigerian banks, whereas capital adequacy, loan loss provisions, and liquidity ratio were not found to have significant effects. Based on these findings, the study recommends that management should design and implement credit policies that are closely aligned with profitability objectives, while also recognizing the implications of such policies for bank operations, asset quality, and risk exposure. Effective credit risk management is essential to minimize loan losses, reduce non-performing loans, and avoid financial distress. Furthermore, management should not focus solely on profit maximization but should adopt strategies that promote sound liquidity management, thereby minimizing excessive fluctuations in liquidity positions and ensuring long-term financial stability. Keywords: Credit Risk Management, Deposit Money Banks, Nigeria, Financial Performance.
Chief Executive Officers’ Characteristics and the Financial Performance of Firms Listed on the Dar es Salaam Stock Exchange: The Moderating Effect of Firm Size
This study examines how Chief Executive Officers’ characteristics influence the financial performance of firms listed on the Dar es Salaam Stock Exchange and whether firm size moderates these relationships. Guided by the Upper Echelons Theory, the study focuses on CEO age, education, experience, professional skills, and gender. Firm performance is measured using return on assets (ROA) and return on equity (ROE). The sample comprises 21 DSE-listed firms observed over the period 2017–2024, yielding a balanced panel of 168 firm-year observations. A positivist philosophy, an explanatory research design, and a quantitative approach are employed. Descriptive statistics and Pearson correlation coefficients are used to analyze the data. Hypotheses are tested using static panel regression models (pooled OLS and fixed effects) and a dynamic two-step system Generalized Method of Moments (GMM) estimator to address endogeneity and performance persistence. Moderation is assessed by including interaction terms between firm size and CEO characteristics. The results show that CEO education, experience and professional skills are positively and significantly associated with both ROA and ROE. CEO age negatively affects profitability, suggesting that older CEOs’ conservative strategies dampen performance in Tanzania’s evolving capital market environment. Female CEOs show a positive but statistically weak effect on ROE and an insignificant effect on ROA, reflecting the limited number of women in top positions and their constrained influence. Firm size strengthens the positive effects of CEO education, experience and professional skills and mitigates the negative impact of CEO age, indicating that large firms benefit more from highly qualified executives and institutional structures that temper excessive conservatism. The study extends UET to an African frontier market and offers practical implications for regulators, boards and investors regarding CEO selection, succession planning and governance reforms. Keywords: CEO characteristics; financial performance; firm size; Upper Echelons Theory; Dar es Salaam Stock Exchange; Tanzania.
Airlines and Economic Growth: Evaluating the Impact of the Aviation Sector on Tanzania’s Development
This study examined the contribution of the aviation sector to Tanzania’s economic growth by analyzing the effects of air passenger traffic, cargo volumes, aviation infrastructure investment, operational air routes, and international tourist arrivals from 1990 to 2024. Employing a mixed-methods design that combined multiple regression analysis with NVivo-assisted thematic analysis, the study provides comprehensive evidence of aviation’s role in shaping national economic performance. The regression findings show that passenger traffic, cargo volumes, and infrastructure investment exert statistically significant positive impacts on GDP growth, highlighting aviation’s contribution to stimulating tourism, trade, and overall productivity. By contrast, the number of operational routes and international tourist arrivals did not demonstrate statistically significant effects, pointing to persistent structural inefficiencies, weak route optimization, and policy misalignment. Qualitative insights reinforced these observations, revealing recurrent themes of infrastructure gaps, policy fragmentation, regulatory delays, and service quality constraints. The study concludes that while Tanzania’s aviation sector holds substantial economic potential, unlocking this potential requires coordinated reforms aimed at enhancing connectivity, strengthening airline competitiveness, and accelerating regional liberalization frameworks. These measures are essential for positioning the aviation sector as a more effective driver of sustained economic development. Keywords: Aviation Sector, Economic Growth, Air Passenger Traffic, Cargo Volumes, Infrastructure Investment, Connectivity, Liberalization, Tourism, SAATM
Effect of Corporate Social Responsibility Expenditure on the Financial Performance: Evidence from Commercial Banks in Kenya
This study investigates the effect of corporate social responsibility (CSR) expenditure on the financial performance of commercial banks in Kenya guided by Legitimacy Theory. The study employed an explanatory research design and adopted census approach, covering all 39 licensed commercial banks as reported by the Central Bank of Kenya. The research relied exclusively on secondary data drawn from audited financial statements, annual reports and CSR disclosures. Data on CSR expenditure and financial performance indicators (return on equity and net profit) were systematically extracted using a document review checklist. Analysis was conducted using descriptive statistics, correlation analysis and regression modeling to determine the nature and strength of the relationship between CSR expenditure and financial performance. Descriptive analysis indicated that banks spent an average of KES 349.03 million on CSR, with wide variability across institutions (range: KES 33.95 million–688.68 million). Financial performance results showed an average return on equity (ROE) of 14.99% and net profit of KES 13.82 billion, reflecting moderate profitability but significant heterogeneity across banks. Larger Tier 1 banks demonstrated higher CSR expenditure, likely due to stronger fiscal capacity and reputational incentives, while smaller banks allocated fewer resources, often treating CSR as discretionary. Correlation analysis revealed that CSR expenditure had weak and non-significant associations with ROE (r = -0.16, p > 0.05) and net profit (r = -0.00, p > 0.05), suggesting that spending alone may not directly translate into improved financial outcomes. Regression analysis further showed that CSR expenditure had a positive effect on financial performance (β = 0.188, t = 2.000, p = 0.053), indicating that while CSR spending may contribute to profitability, the relationship was not statistically significant at the 5% level. The study recommends that commercial banks in Kenya align CSR expenditure with long-term business strategy to achieve both societal impact and financial performance. Policymakers, particularly the Central Bank of Kenya (CBK), should establish baseline CSR investment guidelines and mandate standardized reporting frameworks to enhance transparency, comparability, and accountability. In practice, banks are urged to adopt impact measurement tools such as cost-benefit and return-on-impact analyses, while strengthening stakeholder engagement to build trust and legitimacy. Keywords: Corporate Social Responsibility (CSR), CSR expenditure, financial performance, commercial banks, Central Bank of Kenya (CBK).
Relationship between Return on Assets and Dividend Pay-out Decisions: Evidence from Selected Deposit-Taking SACCOs in Kenya
This study examined the relationship between Return on Assets (ROA) and dividend payout decisions among deposit-taking Savings and Credit Cooperative Societies (SACCOs) in Kenya. The study adopted a descriptive and correlational research design to examine the relationship between Return on Assets (ROA) and dividend payout decisions among deposit-taking SACCOs in Kenya. The target population comprised all 176 SACCOs registered under the SACCO Societies Regulatory Authority (SASRA) as of December 2023, from which a representative sample of 122 was determined using Yamane’s formula at a 95% confidence level. Secondary data covering the period 2019–2023 were collected from audited financial statements, annual reports and SASRA publications, focusing on ROA and dividend payout ratios. Data analysis involved descriptive correlation and multiple regression analysis to determine the extent to which ROA explained variations in dividend decisions. Descriptive statistics revealed that SACCOs maintained relatively stable profitability, with average ROA at 2.39% while dividend payouts averaged 56.21% of total income. Correlation analysis showed a strong positive relationship (r = 0.72) between ROA and dividend payout ratio, indicating that higher profitability is associated with increased member returns. Regression analysis confirmed that ROA significantly influences dividend payout decisions (β = 0.432, p = 0.001), suggesting that efficient asset utilization enhances SACCOs’ ability to reward members. The findings support Dividend Relevance Theory and Signaling Theory, emphasizing profitability as a central determinant of dividend policy in cooperative institutions. The study concludes that ROA is key in shaping dividend payout decisions in Kenyan SACCOs and recommends strengthening asset management practices to sustain profitability and member satisfaction. Future research should explore the moderating effects of liquidity, leverage and regulatory requirements on the ROA-dividend relationship. Keywords: Return on Assets (ROA), Dividend Payout Decision, Deposit-Taking SACCOs, Profitability, Cooperative Governance, Kenya
Effect of Cyber Security Threats on Bank Stability in Nigeria
objective of the research work is to determine the impact of cyber security investments expenditure, fraud incidences and bank size variables on financial stability of Nigerian banks as measured using the Z-score. The study adopts a quantitative research design using panel data from 10 listed banks in Nigeria for the period 2014-2023. Data were analyzed by random effects regression, and to establish the correct model the Hausman test was performed. The results show that cyber security investment has significant positive effect on bank stability, and cyber security attacks, ATM fraud and cyber fraud have significant negative effect on stability. Interestingly, mobile fraud was positively correlated with stability, probably because banks experiencing higher fraud had put greater fraud prevention measures into place. Bank size was found not to have a significant influence on stability. Based on these findings, the study recommends that Nigerian banks invest more in cyber security, intensify regulatory measures and improve the education of the public on fraud prevention. In addition, banks should work together to share cyber security best practices and threat intelligence, which can help to create a more resilient financial system. These initiatives will contribute to reducing risks, building consumer confidence and providing a stable environment for banks in the long run. Keywords: Cyber security threats, bank stability, fraud prevention, Nigeria, financial resilience.
The Role of Strategic Planning in Enhancing Efficiency and Effectiveness in the Public Sector in Zanzibar
This study investigates the role of strategic planning in enhancing efficiency and effectiveness in the public sector, with a specific focus on Zanzibar. The study examined how strategic planning practices such as institutional capacity, leadership commitment, stakeholder engagement, interdepartmental coordination, and resource allocation contribute to organizational efficiency and service delivery. A quantitative approach was employed, using an explanatory quantitative design, structured questionnaires were administered to 160 public-sector officials. Descriptive statistics summarized respondents’ perceptions, while multiple linear regression tested the association between the five strategic-planning dimensions and institutional efficiency and effectiveness. Findings revealed that the five variables together explained 52.1% of the variance in efficiency and effectiveness (R² = 0.521). At the variable level, Leadership Commitment was the strongest predictor (B = 0.28, p < 0.001), followed by Institutional Capacity (B = 0.24, p < 0.01) and Interdepartmental Coordination (B = 0.20, p < 0.01). Stakeholder Engagement also contributed positively, though with a smaller effect (B = 0.14, p < 0.05). By contrast, Resource Allocation showed a weaker and statistically non-significant effect (B = 0.07, p > 0.05). These findings indicate that, beyond the mere presence of resources, strengthening institutional capacities, leadership commitment, and interdepartmental coordination are the key drivers of public-sector performance in Zanzibar. The study concludes that strategic planning serves not only as a managerial tool but also as a governance mechanism that fosters accountability, resource optimization, and citizen-centered service delivery in Zanzibar. Policy implications call for prioritizing capacity building, evidence-based resource alignment and mechanisms to enhance interdepartmental coordination to improve institutional efficiency and effectiveness. Keywords: Strategic Planning, Efficiency, Effectiveness, Public sector, Institutional Capacity, Interdepartmental Coordination, Stakeholder Engagement, Leadership Commitment and Resource Allocation
Taxation Policies, Interest Rates and Foreign Direct Investments: Evidence from East Africa Community Member Countries
This article examines how interest rates shape the relationship between taxation policies and foreign direct investment in East African Community member countries from 2014 to 2023. Using a random effects generalized least squares panel framework, the analysis proceeds in the standard three step sequence. First, corporate income tax, capital gains tax, withholding tax, and value added tax each show clear negative associations with foreign direct investment when considered together, establishing a strong baseline. Second, introducing the interest rate alongside the four tax instruments improves model fit and reveals a distinct negative association between higher borrowing costs and investment inflows, indicating that monetary conditions add meaningful explanatory power beyond tax variables alone. Third, interaction terms between the interest rate and each tax instrument are negative and significant, demonstrating that interest rates systematically amplify the adverse association between taxes and foreign direct investment. In practical terms, tighter credit conditions deepen the penalty investors perceive from higher profit, exit, remittance, and consumption related taxes by compressing after tax returns and heightening working capital pressures. The findings show that investment outcomes reflect a combined fiscal and monetary environment, and they underscore that tax reforms aimed at competitiveness will be most effective when coordinated with policies that stabilize financing costs. Keywords: Foreign direct investment, taxation policies, corporate income tax, capital gains tax, withholding tax, value added tax and interest rate
Influence of Loan Size, Collateral Value and Leaders' Creativity on Loan Repayment among Tanzanian Rural Savings and Credit Cooperative Societies
The study investigated the effects of loan size, collateral value, and leaders’ creativity on loan repayment in savings and credit cooperative societies (SACCOS) in the rural areas of Morogoro Region, Tanzania. The study employed an explanatory study design and the survey approach. The study population consisted of 4,200 SACCOS borrowers in Morogoro Rural District. A random sampling design was applied to select borrowers who had started repaying their loans. The structured questionnaire collected the primary data from 270 borrowers. The multiple regression technique was used to analyze the field data. The findings disclosed that loan size, collateral value and leaders’ creativity promoted positively and significantly the repayment of loans in rural Tanzanian SACCOS. While most previous studies assessed the determinants of the loan repayment in Tanzania, none of them assessed how the loan size, collateral value and leaders’ creativity promoted the repayment of loans in rural Tanzanian SACCOS. The study recommends the policy makers to enforce loan size, collateral value and leaders’ creativity in SACCOS in Tanzania. Keywords: Loan Size, Collateral Value, Leaders’ Creativity and Innovation, Rural SACCOS Loan Repayment, Tanzania
Financial Distress, Fiscal Policies, Liquidity and Firm Performance: A Critical Review of Literature
Financial distress remains a critical challenge for businesses, often impairing their ability to meet financial obligations and determining whether they recover or collapse. Recent corporate failures have heightened stakeholder interest in understanding the dynamics of financial distress and their implications for organizational sustainability. This study undertakes a critical review of theoretical and empirical literature to examine the relationship between financial distress and firm performance. Specifically, it investigates the mediating role of fiscal policies, the moderating influence of liquidity, and the comparative impact of these factors on firm outcomes. Grounded in financial distress theory and supported by Keynesian, cash flow, and liquidity preference perspectives, the review reveals a consistent inverse relationship between financial distress and firm performance, despite some studies suggesting a positive association. Such contradictions are attributed to differences in constructs, methodologies, and contextual settings. The findings provide actionable insights for managers and executives seeking to anticipate risks and design effective strategies to mitigate financial distress. Additionally, the study contributes to academic discourse by identifying gaps in the literature and offering directions for future research, thereby enriching understanding of corporate finance and organizational performance. Keywords: Corporate Finance, Financial Distress, Financial Performance, Liquidity and Fiscal Policies.
Exploring the Determinants of ICT Software Disclosure under IAS 38: Insights from Selected Listed Banks in Sub-Saharan Africa
This study investigates the determinants of ICT software disclosure under IAS 38 among some listed commercial banks in Sub-Saharan Africa. Using a quantitative ex-post facto design and panel regression analysis, it examines 456 firm year observations from 38 banks across six countries (2012–2023). A disclosure index developed from audited financial statements measures ICT reporting practices. Results show that firm size, Big Four auditor engagement and firm age significantly enhance disclosure, while board independence exerts a negative effect. Ownership, leverage and profitability display weak or inconsistent influence. Country variations show high disclosure in Tanzania and low in Botswana. This highlights the role of institutional environments. The findings emphasize the importance of context specific disclosure frameworks, governance training and reputable auditors. The study contributes to institutional and resource based perspectives by demonstrating how firm attributes and national contexts jointly shape ICT disclosure patterns in African banking. Keywords: ICT software disclosure, IAS 38, Sub-Saharan Africa, firm attributes, corporate governance, intangible assets, financial transparency.
Empirical Analysis of Capital Market Indicators on Capital Formation in Nigeria
This study examines the impact of capital market indicators on capital formation in Nigeria from 1990-2023 using stock market indicators of All-Share Index, market capitalization, value of shares traded and volume of transactions while gross capital formation was proxied for capital formation. Secondary data were obtained from the Nigeria Exchange Group and Central Bank of Nigeria Statistical Bulletin. Regression analysis was employed to obtain results for the study. Findings from the study show that All-Share Index, market capitalization, value of shares traded, volume of transactions were statistically significant to gross capital formation. The statistical significance of all the variables shows the importance of capital market on capital formation, hence government should take adequate measures to strengthen the capital market to boost the economy so as to provide better access to funds for investment purposes and hence, further stimulating capital formation which is an essential ingredient for economic growth. Keywords: Capital Market Indicators, Capital Formation, Regression Analysis, Nigeria
Access to Finance, Micro financing, Financial Literacy and Growth of Small and Medium Sized Enterprises: A Critical Review of Literature
Access to finance, micro financing, and financial literacy are critical drivers of SME growth, enabling investment, innovation, and effective financial management. This study reviews theoretical and empirical literature to examine how access to finance influences SME growth, focusing on the mediating role of micro financing and the moderating effect of financial literacy. It also compares their relative impact on this relationship. The findings aim to guide SME owners and managers in understanding barriers to financing and the value of microfinance in meeting their funding needs, while offering scholars insights to expand research on finance accessibility and SME development. Grounded in credit rationing theory, supported by financial growth life cycle theory, resource-based view, and stages of growth theory, the study addresses gaps in existing research, which often overlooks the combined effects of mediators and moderators. The results underscore that microfinance strengthens the finance–growth link, and financial literacy enhances it, emphasizing the importance of education initiatives that empower entrepreneurs. Keywords: Access to Finance, Micro Financing, Financial Literacy, SME Growth and Credit Rationing Theory, Small and Medium Enterprises (SMEs
Unmasking the Path to Sustainable Fraud Mitigation through Cybersecurity Investments: Insights from Commercial Banks in Tanzania
This study investigates how cybersecurity investments contribute to sustainable fraud mitigation in Tanzanian commercial banks. Using quantitative research design, data were collected from 293 banking professionals across ten banks, including IT, risk, compliance, and cybersecurity officers. Analysis using SmartPLS revealed that Incident Response Preparedness, Fraud Detection Systems Effectiveness, and Customer Awareness Programs significantly enhance fraud mitigation, while technological investments, employee training, and cybersecurity culture showed no significant impact. The model explained 53.2% of the variance in fraud mitigation outcomes, indicating strong explanatory power. The findings emphasize that banks should prioritize capability-based measures—such as detection systems and response readiness—over mere capital expenditure. Policymakers and regulators are encouraged to integrate cybersecurity into governance frameworks for long-term sustainability. The study provides novel empirical evidence from Tanzania, advancing understanding of how capability-driven cybersecurity strategies enhance fraud resilience in emerging financial markets. Keywords: Cybersecurity investments, Fraud mitigation, Sustainable banking, Tanzanian commercial banks.
The Effect of Corporate Governance on Tax Planning Strategies: Insights from Firms Listed on the Dar es Salaam Stock Exchange
This study examines the role of corporate governance in shaping tax planning strategies among firms listed on the Dar es Salaam Stock Exchange (DSE) in Tanzania. Guided by Agency Theory, the research explores how governance mechanisms such as board independence, audit committees, and CEO duality influence firms' tax practices. A quantitative approach was employed, using secondary data from the financial reports of 83 firms. Regression analysis revealed a strong positive correlation between corporate governance and tax planning, with governance explaining 96.1% of the variance in tax strategies. The results highlight that firms with robust governance structures are more likely to engage in ethical and compliant tax planning, minimizing the risk of aggressive tax avoidance. The study concludes that enhancing corporate governance can improve tax transparency and compliance. It recommends that firms strengthen governance practices and that policymakers provide clearer guidelines to ensure responsible tax management. Future research could explore the interaction between governance and external economic factors such as inflation and regulatory changes. Keywords: Corporate governance, tax planning, Dar es Salaam Stock Exchange, tax compliance.
Service Quality Management Practices and Financial Sustainability of SACCOS in Magu and Kwimba Districts, Tanzania: The Mediating Effect of Service Innovation
The study examined the structural relationships between service quality management practices (SQMP) and financial sustainability (FS) with mediating effect of Service innovation practices (SIP). A cross-sectional research design was employed with a Quantitative approach. Data was collected from 351 SACCOS members in Mangu and Kwimba Districts using a structured questionnaire. Data was analyzed using Structural Equation Modelling (SEM) with bootstrapping method, revealing that SQMP significantly and positively (β = 1.109; p < 0.001; β = 0.650, p < 0.05) influence both the SIP and FS. The SIP strongly (β = 0.860; p < 0.001) mediate the relationship between SQMP and FS. The study concludes that, while SQMP directly enhances the FS, its effectiveness is reinforced when coupled with SIP. The study recommends SACCOS leaders, management, unions and supporting stakeholders to institutionalize SQMP integrated with SIP to ensure FS of SACCOS in the study area. Keywords: Service Quality Management, Service Innovation, Financial Sustainability, SACCOS
Remittance-Growth Nexus: Does Financial Development Mediate? Evidence from Nepal and Tanzania
The international labor movement is possible after economic globalization, and remittance maintains profound economic relations across countries. Having limited comparative studies, this study examines the impact of remittance on economic growth with the mediating role of financial development in Nepal and Tanzania, covering time series data from 1995 to 2023. This study applied the Autoregressive Distributed Lag (ARDL) model to examine the long run cointegration among variables. Long-run results revealed that remittance has a positive relation with economic growth in Nepal but does not significantly influence the growth of Tanzania. Regarding the interaction term of financial development and remittance, it hurts growth in Nepal and does not significant impact on growth in Tanzania. However, financial development positively influenced the economic growth in Tanzania, whereas no significant impact on growth in Nepal. Furthermore, physical and human capital and inflation have a negative relationship; rural population has a positive relationship; and trade openness has no significant relationship with growth in Tanzania. In contrast, in Nepal, trade openness has a positive relationship, rural population has a negative relationship, and physical capital and human capital have no significant relationship with growth. Moreover, in the short run, financial development positively influenced the growth in Tanzania, and the financial mediation negatively impacted the growth in Nepal. The findings, therefore, recommended that the government should channel remittances to human and physical capital formation that may foster sustained growth; otherwise, relying on import-led growth and a blithe attention to other sectors' development may lead to Dutch disease. Keywords: human capital, physical capital, trade, inflation, ARDL.