| dc.description.abstract | Universities provide higher education that boosts formation of human capital through
inculcation of knowledge, skills and promotion of talents which contribute significantly
to the economic development of a country. Despite this significant contribution, Kenyan
universities have continued to face financial challenges due to inadequate funds and
increasing operational costs leading to financial unsustainability. This has stifled
operations in the Kenyan universities. The study sought to establish the influence of
financing options on the financial sustainability of universities in Kenya. Specifically, the
influence of revenue streams, debt financing and the joint influence of financing options.
The moderating influence of institutional characteristics and mediating influence of funds
utilization was also examined. Five research hypothesis relating to objectives were tested.
The study used positivist research philosophy and employed longitudinal survey design.
The study collected secondary data from annual financial statements and reports from 55
universities, comprising of 31 public universities and 24 private universities, covering the
period 2015 to 2020. The study used descriptive and inferential statistics to analyze the
data. Prob (F-statistics) were used to test hypotheses in the study. The results revealed that
p = 0.000<0.05 for both public and private universities. H01 was concluded that revenue
streams had a statistical significant influence on financial sustainability for both public
and private universities. With p = 0.037<0.05, p = 0.028<0.05 for public and for private p
= 0.015<0.05, p = 0.044<0.05 on financial sustainability as measured by current ratio and
financial liability ratio respectively, H02 was concluded that debt financing had a statistical
significant influence on financial sustainability for both public and private universities.
With p = 0.013<0.05, p =0.358>0.05 for public and for private p = 0.027<0.05, 0.543>0.05
on current ratio and financial liability ratio respectively, H03 was concluded that financing
option had a statistical significant influence on financial sustainability as measured by
current ratio while insignificant on financial liability ratio for both public and private
universities. With p = 0.036<0.05, p = 0.017<0.05 for public and for private p =
0.040<0.05, p = 0.020<0.05 on financial sustainability, H04 was concluded that the
strength of the relationship between financing options and financial sustainability depends
on institutional characteristics. The recurrent expenditure had p-values<0.05 on financial
sustainability. With p-values<0.05 for capital expenditure on financial sustainability as
measured by financial liability ratio while on current ratio the p-values>0.05 for both
public and private universities respectively. H05 was concluded that the strength of the
relationship between financing options and financial sustainability partially depends on
funds utilization. The study highlight that the university management needs to formulate
diversified strategies to create and attract more revenue streams to meet university’s
operational costs. In addition, the university management need to employ optimal debt
levels when necessary. Universities need to expand academic and research programmes
and also put strict measures on how funds are spent. The study findings contribute to the
policy makers, existing empirical literature and researchers. | en_US |
