PhD Theses: Department of Department of Business Studies
Permanent URI for this collection
Browse
Recent Submissions
Item Macroeconomic Factors, Foreign Portfolio Investment, Market Capitalization and Stock Return of Firms Listed at the Securities Exchanges in East Africa(2022-09) Kimani Ngure, FrancisABSTRACT Securities exchange play a vital role in the growth of an economy by encouraging savings and investment, as well as helping local and international investors to access cost-effective capital. Despite the benefits of the sector, investors are faced with high volatility of stock returns which poses greater risk to their investment. This study thus investigated the effect of macroeconomic factors, foreign portfolio investment and market capitalization on stock returns of firms listed in the East Africa Securities Exchanges. The study adopted arbitrage pricing theory, the neoclassical theory of investments and efficient market hypothesis. The study was guided by positivist research philosophy and longitudinal research design. The target population comprised of all the ninety-six listed companies in the Securities Exchanges in East Africa which have traded for five consecutive years as at 31st December 2020. The study used secondary data for five years ranging from 2016 to 2020. The study found that macroeconomic factors significantly affect stock returns. Specifically, foreign exchange rate negatively and significantly affects stock returns. Gross domestic product positively and significantly affects stock returns. Inflation rate negatively and significantly affects stock returns. Similarly, interest rate negatively and significantly affects stock returns. The study also found that macro-economic variables significantly affect foreign portfolio investment. Specifically, foreign exchange rate positively and significantly affects foreign portfolio investment. Gross domestic product on the other hand negatively and significantly affects foreign portfolio investments. Inflation rate negatively and significantly affects foreign portfolio investment. Interest rate positively and significantly affects foreign portfolio investment. The study also found that foreign portfolio investment positively and significantly affects stock returns and intervene the relationship between macroeconomic factors and stock returns. Market capitalization also significantly affect stock returns and moderates the relationship between macroeconomic factors and stock return. The study concluded that macroeconomic variables significantly affect stock returns. The study also concluded that foreign portfolio investment intervenes the relationship between macro-economic economic factors and stock returns. Similarly, market capitalisation positively and significantly affected stock performance of the listed firms and moderates the relationship between macroeconomic factors and stock returns. The study recommends that governments and other stakeholders should put in place macro prudential policies in order to encourage investments and boost stock returns. The regulators should come up with policies that will stabilize inflation, reduce or stabilize interest rates, stabilize or reduce exchange rates and also ensure growth in GDP. Directors of various firms and investors in the stock exchange should also scan the nature of macro environment and come up with strategies that will counter the negative effects and capitalise on the opportunities. The study suggested that future research may focus on data from other firms operating in different stock exchanges to compare and contrast the effect of macro prudential policies adopted in the various countries and its effects on foreign portfolio investment and stock returns.Item Corporate Governance, Financial Risk Management, Firm Characteristics And Performance of Insurance Firms in Kenya(2022-09) Kibet Kiptoo, IsaacThe insurance industry plays a pivotal role in providing innovative solutions to the significant social, economic and environmental challenges the country faces. Despite the contribution of the sector, insurance firms are faced with various financial risks. The sector has also been reporting losses while some firms have been put under statutory management due to inability to honor customer claims. This indicates that the firms are not properly managed. This study investigated the relationship between corporate governance, financial risk management, firm characteristics and performance of insurance firms in Kenya. The study was anchored on six theories namely: stewardship theory, agency theory, resource-based theory, credit risk theory, modern portfolio theory and Keynesian liquidity preference theory. The study adopted positivist research philosophy and causal research design. The target population was 55 insurance firms registered by IRA to operate in Kenya as at December, 2018. The study employed secondary data obtained from the audited financial statements of the insurance firms covering a six-year period from the year 2013 to 2018. The data was collected from 51 insurance firms and regression analysis was used to evaluate the relationship between the variables. The findings indicated that corporate governance significantly affect the financial performance of insurance firms in Kenya. Specifically, board composition negatively and significantly affects financial performance. The results implied that increasing the number of executive directors in the board hinders the performance of insurance firms. Similarly, Board size negatively and significantly affects financial performance implying that bigger board sizes are detrimental to insurance firm performance. Board diversity positively and significantly affects financial performance. The results implied that boards consisting of more professionally qualified directors enhance firm performance. Similarly, board independence positively and significantly affects financial performance implying that allowing company directors to be independent promotes better firm performance. The results also indicated that financial risk management significantly affects firm performance. Specifically, credit risk negatively and significantly affects financial performance while market risk, operational risk and liquidity risk positively and significantly affects financial performance. The findings also indicated that firm characteristics significantly affect performance. Specifically, firm size positively and significantly affects performance while firm age negatively and significantly affects performance. The results imply that young and large insurance firms perform better than small and old insurance firms. The findings also indicated that financial risk management intervenes the relationship between corporate governance and performance of insurance firms. Similarly, firm characteristics moderate the relationship between corporate governance and performance. The study concluded that corporate governance is critical as it ensures better financial performance. The study also concluded that firm characteristics enhances corporate governance which in turn boosts financial performance. The study recommends that directors should put in place proper corporate governance structures and risk management strategies to boost financial performance. The Insurance Regulatory Authority should also ensure insurance firms adopt appropriate governance structures and risk management strategies in order to enhance performance.Item Product life cycle extension strategies, market based policies, customer loyalty and performance of fast moving consumer goods firms in kenya(Rwamba Pauline, 2024-08) Pauline, RwambaProliferations of strategic interplay among manufacturing firms threaten the sustainability of fast-moving consumer goods in Kenya. In realization of vision 2030, manufacturing was envisaged as a core area in job creation and poverty eradication. Unfortunately, previous statistics showed that there has been a downward trend on performance of manufactured fast moving consumer goods in Kenya. It is in this regard that this study sought to determine the influence of product life cycle extension strategies, market-based policies and customer loyalty on performance of fast-moving consumer goods firms in Kenya. The study was anchored on three theories namely; game theory that was used to model the study, marketing mix theory and economic theory of regulation from which the variables were derived. The study adopted pragmatism research philosophy and cross-sectional research design. Through census, study population was 193 fast moving consumer goods firms. Secondary data was collected using questionnaires and data collection schedules for the period covering 2017-2021 for 161 firms since 32 did not respond to the questionnaires hence expunged from the study. Data was analyzed using multiple linear regression models. Study found that repositioning, promotion, price adjustment and rebranding strategies had positive and significant effect on performance of fast-moving consumer goods firms in Kenya. Secondly, the study established that market-based policies had a negative and significant moderating effect on the relationship between product life cycle extension strategies and performance of fast-moving consumer goods firms in Kenya. Lastly, the results indicated that customer loyalty had positive and significant mediating effect on the relationship between product life cycle extension strategies and performance of fastmoving consumer goods firms in Kenya with evidence of partial mediation. The study concluded that adoption of PLC extension strategies namely repositioning, promotion, price adjustment and rebranding strategies were important in enhancing performance of FMCG firms in Kenya. The study further concluded that market-based policy led to poor performance while adopting product life cycle extension strategies played an important role in enhancing customer loyalty which would lead to improved performance. The study recommends that senior management staff of the firms should embrace and enhance implementation of the four PLC extension strategies for prolonged profit reaping. In addition, management should improve the current implementation approaches of PLC extension strategies as a whole so as to enhance customer loyalty that will lead to high rate of repeat and referral customers. Further, the study recommends that relevant Kenyan Government authorities and policy makers reconsider and revise current market-based policies regarding input tariffs on fast moving consumer goods so as to improve performance. The study contributes to the existing body of knowledge in this area.Item Corporate Governance, asset structure, and value of firms listed Nairobi Securities Exchange, Kenya(Nkonge, Habakkuk Barine, 2024-08)This study examines the dynamics of corporate governance and asset structure on the valuation of firms listed on the Nairobi Securities Exchange (NSE) in Kenya, set against the backdrop of a global financial landscape where the estimated value of listed firms is around 80 trillion United States dollars. Despite significant intrinsic worth, many firms have experienced a decline in market value, prompting this investigation. Utilizing a positivist perspective, the research adopted a causal-comparative design, focusing on a target population of 64 firms. Secondary data was sourced from audited annual financial reports submitted to the NSE and the Capital Markets Authority covering 2010 to 2019. The study used panel data analysis and multiple linear regression techniques to examine the data. Additionally, various diagnostic tests were conducted to assess the regression model's assumptions, including normality, heteroscedasticity, multicollinearity, and linearity tests. These tests helped to establish the degree of reliability and validity of the analytical results, thus creating a sound basis for considering the impact of corporate governance and asset structure on firms’ valuation in the Kenyan setting. The impact of corporate governance and asset structure on the value of firms listed in the NSE, was analyzed using a random-effect model, indicating that Corporate Governance significantly influences firms' value, indicating that stronger governance practices enhance firm valuation. Similarly, asset structure was shown to significantly affect firm value, suggesting that the composition and quality of assets are critical determinants of how firms are valued in the market. Both corporate governance and asset structure serve as key predictors of a firm's overall value, emphasizing the importance of these factors in investment decisions. The study identified the role of financial performance as a moderator with regard to the impact of corporate governance, asset structure, and firm value. This implies that strategies enhancing governance and assets can result into better financial performance and, hence, firm value. The study revealed further that the macro environment variables did not exercise any significant moderating influence on the corporate governance firm value nexus. Although, they showed a significant moderating role in the case of the impact of asset structure on firm value and the emergence of the fact that external economic conditions play a role in modulating the effects of varying asset structure on firm value. These findings have significant implications for investors and the management of the Capital Markets Authority, indicating that improving corporate governance and optimizing asset structure can result in better financial performance and increased firm valuation. Investors may benefit from considering these factors when making investment decisions, while regulatory bodies may focus on fostering better governance practices and asset management strategies among listed firms. The study advocates for a strategic focus on enhancing firm value through improvements in corporate governance and asset structure rather than depending on macroeconomic factors. This finding emphasizes the importance of internal management practices in driving firm valuation, suggesting that firms may achieve more significant outcomes by prioritizing these areas. The study lays the groundwork for further exploration into the interconnections between corporate governance, asset structure, and firm value. Future research can build on these findings, potentially uncovering additional dimensions and insights related to these critical factors.Item Product Life Cycle Extension Strategies, Market Based Policies, Customer Loyalty and Performance of Fast Moving Consumer Goods Firms in Kenya(UoEm, 2024-09-02) RWAMBA, PAULINEProliferations of strategic interplay among manufacturing firms threaten the sustainability of fast-moving consumer goods in Kenya. In realization of vision 2030, manufacturing was envisaged as a core area in job creation and poverty eradication. Unfortunately, previous statistics showed that there has been a downward trend on performance of manufactured fast moving consumer goods in Kenya. It is in this regard that this study sought to determine the influence of product life cycle extension strategies, market-based policies and customer loyalty on performance of fast-moving consumer goods firms in Kenya. The study was anchored on three theories namely; game theory that was used to model the study, marketing mix theory and economic theory of regulation from which the variables were derived. The study adopted pragmatism research philosophy and cross-sectional research design. Through census, study population was 193 fast moving consumer goods firms. Secondary data was collected using questionnaires and data collection schedules for the period covering 2017-2021 for 161 firms since 32 did not respond to the questionnaires hence expunged from the study. Data was analyzed using multiple linear regression models. Study found that repositioning, promotion, price adjustment and rebranding strategies had positive and significant effect on performance of fast-moving consumer goods firms in Kenya. Secondly, the study established that market-based policies had a negative and significant moderating effect on the relationship between product life cycle extension strategies and performance of fast-moving consumer goods firms in Kenya. Lastly, the results indicated that customer loyalty had positive and significant mediating effect on the relationship between product life cycle extension strategies and performance of fastmoving consumer goods firms in Kenya with evidence of partial mediation. The study concluded that adoption of PLC extension strategies namely repositioning, promotion, price adjustment and rebranding strategies were important in enhancing performance of FMCG firms in Kenya. The study further concluded that market-based policy led to poor performance while adopting product life cycle extension strategies played an important role in enhancing customer loyalty which would lead to improved performance. The study recommends that senior management staff of the firms should embrace and enhance implementation of the four PLC extension strategies for prolonged profit reaping. In addition, management should improve the current implementation approaches of PLC extension strategies as a whole so as to enhance customer loyalty that will lead to high rate of repeat and referral customers. Further, the study recommends that relevant Kenyan Government authorities and policy makers reconsider and revise current market-based policies regarding input tariffs on fast moving consumer goods so as to improve performance. The study contributes to the existing body of knowledge in this areaItem Diversification Strategies, Corporate Cannibalisation, Environmental Munificence and Financial Performance of Insurance Companies in Kenya(UoEm, 2023-09-15) Gachoki, John MutugiInsurance industry in Kenya is an important contributor to the economic growth of the country. Provision of financial security, extension of financial services, guaranteeing of future continuity of businesses are just part of the functions played by the insurance industry in the country. Insurance companies have diversified their operations aimed at improving industry financial performance. Despite the diversification, the insurance industry has shown negative financial performance indicated by among others a consistent decline of insurance penetration from 3.44% in 2013 to 2.43% in 2018 to 2.17 in 2020. This study hypothesized that corporate cannibalization mediated the diversification effect hence influencing financial performance. Also, the study hypothesized that environmental munificence moderated the diversification effect thus influencing the financial performance of insurance companies. This study therefore sought to establish the effects of diversification strategies, corporate cannibalization and environmental munificence on financial performance of insurance companies in Kenya. The theoretical foundation of the study was, resource based theory, contingency theory, transaction cost theory and the. expectancy theory. The study was anchored on a positivism philosophical stance that lays more emphasis on quantifiable observations. The study employed a causal comparative research design. A census was conducted on the entire population of all the 55 registered and licensed insurance companies in Kenya. Secondary data was used in this study and was collected through a secondary data collection schedule. Data was collected for 5 years from the year 2017 to the year 2021. A multiple regression model was used to determine the extent and strength of relation between diversification strategies, corporate cannibalization, environmental munificence and financial performance of insurance companies. The study found that diversification strategies positively affected financial performance of insurance companies. Also the study established that both corporate cannibalization and environmental munificence negatively affected financial performance of insurance companies. The study concluded that diversification strategies had a significant effect on financial performance of insurance companies in Kenya. This study also concluded that corporate cannibalization had significant mediating effect on the relationship between diversification strategies and financial performance of insurance companies. It was also concluded that environmental munificence had a significant moderation effect on the relationship between diversification strategies and financial performance of insurance companies. Lastly, the study concluded that there existed a significant joint effect between diversification strategies, corporate cannibalization, and environmental munificence on financial performance of insurance companies in Kenya. The study recommended that insurance companies should embrace diversification strategies to improve financial performance. Further, the diversification should only be adopted when the environment is munificent. Also, the study recommended unrelated diversification in order to avoid cannibalization. It is expected that the findings of this study will help the government and insurance companies in policy formulation. Scholars and researchers in the field of strategic management will also benefit from the new knowledge gathered on diversification strategies, corporate cannibalization, and environmental munificence.Item Influence of Macro Environment on the Performance of Business Process Outsourcing Companies in Kenya(University of Embu, 2021-09) Chege, Purity N.Business Process Outsourcing is one of the six priority sectors in the economic pillar of the Kenya Vision 2030. The vision envisages that the country becomes the top business process outsourcing destination in Africa. However, this has not been achieved since some other countries like South Africa, Ghana, Morocco, and Egypt have been more preferred destinations than Kenya. Statistics have also shown that the global business process outsourcing destination position for Kenya has deteriorated. It is in this regard that this study sought to establish the influence of macro environment on the performance of the business process outsourcing companies in Kenya. The study was underpinned by four theories, namely, Open systems, Porters Diamond, Contingency and Macro Environment model. Pragmatic paradigm was used to support the mixed research approach used in the study. The target population consisted of all 118 registered business process outsourcing companies in Kenya. Primary data was collected using a questionnaire with a Likert-type interval using a five-point scale. Additionally, secondary data from 2014 to 2017 on performance, namely, the number of services and return on assets was collected. To improve the reliability and validity of data, pretesting of the research instrument was carried out on 12 companies. Cronbach's reliability coefficients ranged from 0.740 to 0.891 which was more than 0.7 and thus the research instrument was found to be reliable and valid for the study. Tests on assumptions of the regression models namely, linearity, multicollinearity, autocorrelation and heteroscedasticity were all met. Descriptive statistics showed the features and patterns of the data. Analysis of variance showed that there was a significant relationship between all the independent variables with the dependent variable. The regression analysis was carried out through testing of five null hypotheses which were all rejected since there was a statistically significant influence of political, economic, technological, and legal environments on the performance of business process outsourcing companies in Kenya. Further, there was a moderating influence of firm strategy on the performance of the business process outsourcing companies in Kenya. The study recommends that the companies adopt new technology, come up with innovations of doing business, expand their offshore business by positioning themselves internationally and diversify their services. Regarding policy, the study recommends that the cybercrimes legislation be reviewed and amended continuously to address the emerging cybercrimes to ensure the security of customer data in possession of the business process outsourcing companies. The study recommends that other studies be replicated in other sectors and countries to establish whether the results would be similar. In addition, studies may be carried out on the combined influence of both micro and macro environments while other variables be considered as moderators between macro environment and performance while the firm strategy may be considered as one of the independent variables to establish its influence on performance. The study has provided contribution to the Contingency Theory by establishing a positive influence of external environment on performance and particularly the economic and technological environmentsItem Internal Control System and Fraud Prevention in Banking Sector in Kenya(University of Embu, 2020-11) Nyakarimi, Samuel N.The main objective of the study was to determine the effect of the internal control system on fraud prevention in the Banking Sector in Kenya. Studies have been carried out by different researchers some focused-on fraud in commercial banks and others on internal controls in government departments. This study filled the gap by focusing on the effect of internal control system on fraud prevention in banking sector. Research was based on control environment, risk assessment, communication of information, and monitoring as independent variables, compliance with prudential regulations as moderating variable and fraud prevention as dependent variable. Theories that guided the study include; agency, fraud management lifecycle, fraud triangle and fraud diamond theories. The study captured various empirical studies to provide more information on the study on this research area. Pragmatism philosophy, the research designs applied were descriptive and correlational. The study utilized mean and standard deviations for descriptive research design. The study involved all banks registered and operating in Kenya and the respondents were all branch managers, operations managers and cash managers or supervisors in all headquarters or offices of these banks. Questionnaire was used for primary data and secondary data schedule for secondary data correction. Coding of data was undertaken for processing and analysis. Document analysis was used to analyse qualitative data. ANOVA test was applied to test the overall significance of the model, to test multicollinearity to determine whether there is inter-correlation among independent variables, the variance inflation factor was used, to test autocorrelation and heteroscedasticity, Durbin-Watson test and Breusch-Pagan test respectively were applied. Exploratory factor analysis was applied to extract factors where principal component analysis and varimax rotation methods were applied where seven factors were extracted. Confirmatory factor analysis was used to determine construct bias and validity and was concluded that there was no bias and the research instruments were valid. Further analysis on determination of model fit involved chi-square, comparative fix index, root mean square for error approximation, pclose and standardized root mean residual and was found that the model fit well except for SRMR. Karl Pearson’s coefficients of correlation were used to test the strength and to show the direction of association of variables and the tstatistics was applied to test the hypotheses. The hypotheses tests were based on structural equation modelling and it was found that risk assessment, communication and monitoring had significant effect on fraud prevention whereas control environment and control activities had insignificant effect. Further it was found that compliance with prudential regulations has no significant moderating effect on the relationship between control environment and fraud prevention and risk assessment and fraud prevention. The study applied Beneish model and probit regression in analysis of secondary data and it was found that financial statement manipulation is rife in seven banks thus those banks have weak ICS and are not capable of preventing fraud. Recommendations from study are that new ways of strengthening ICS should be established and that the government should review regulations. Further research should be carried out with cross sectional research design that will include questionnaire, interview and secondary data schedule.Item Influence of Macro Environment on the Performance of Business Process Outsourcing Companies in Kenya(University of Embu, 2021-09) Chege, Purity N.Business Process Outsourcing is one of the six priority sectors in the economic pillar of the Kenya Vision 2030. The vision envisages that the country becomes the top business process outsourcing destination in Africa. However, this has not been achieved since some other countries like South Africa, Ghana, Morocco, and Egypt have been more preferred destinations than Kenya. Statistics have also shown that the global business process outsourcing destination position for Kenya has deteriorated. It is in this regard that this study sought to establish the influence of macro environment on the performance of the business process outsourcing companies in Kenya. The study was underpinned by four theories, namely, Open systems, Porters Diamond, Contingency and Macro Environment model. Pragmatic paradigm was used to support the mixed research approach used in the study. The target population consisted of all 118 registered business process outsourcing companies in Kenya. Primary data was collected using a questionnaire with a Likert-type interval using a five-point scale. Additionally, secondary data from 2014 to 2017 on performance, namely, the number of services and return on assets was collected. To improve the reliability and validity of data, pretesting of the research instrument was carried out on 12 companies. Cronbach's reliability coefficients ranged from 0.740 to 0.891 which was more than 0.7 and thus the research instrument was found to be reliable and valid for the study. Tests on assumptions of the regression models namely, linearity, multicollinearity, autocorrelation and heteroscedasticity were all met. Descriptive statistics showed the features and patterns of the data. Analysis of variance showed that there was a significant relationship between all the independent variables with the dependent variable. The regression analysis was carried out through testing of five null hypotheses which were all rejected since there was a statistically significant influence of political, economic, technological, and legal environments on the performance of business process outsourcing companies in Kenya. Further, there was a moderating influence of firm strategy on the performance of the business process outsourcing companies in Kenya. The study recommends that the companies adopt new technology, come up with innovations of doing business, expand their offshore business by positioning themselves internationally and diversify their services. Regarding policy, the study recommends that the cybercrimes legislation be reviewed and amended continuously to address the emerging cybercrimes to ensure the security of customer data in possession of the business process outsourcing companies. The study recommends that other studies be replicated in other sectors and countries to establish whether the results would be similar. In addition, studies may be carried out on the combined influence of both micro and macro environments while other variables be considered as moderators between macro environment and performance while the firm strategy may be considered as one of the independent variables to establish its influence on performance. The study has provided contribution to the Contingency Theory by establishing a positive influence of external environment on performance and particularly the economic and technological environments.Item Sustainability of the Small-Scale Tea Processors in Kenya(University of Embu, 2019-04) Kiende, Gatimbu K.The tea industry remains vital for export earnings, employment creation and GDP growth. These processors, however, are experiencing a persistent rise in their cost of production. They have pursued sustainability initiatives to scale down production costs. However, the outcome of such initiatives has not been measured. This study thus sought to determine the sustainability of the small-scale tea processors in Kenya. A pragmatic paradigm research philosophy was adopted. All the 54 factories were considered for the study. Primary data entailed interviews with Key Informants. Secondary data was obtained from factory documents and reports, peer-reviewed publications and grey literature. Data Envelopment Analysis was used to compute the environmental efficiency scores. Tobit regression was applied to determine the influential factors of firm variation in environmental efficiency. Stochastic Frontier Analysis was used to determine the technical efficiency scores, as well as determinants in a one-step estimation equation. A Meta-technical efficiency method was used to establish regional efficiency estimates. Finally, Emergy methodology was used to assess the ecological/economic sustainability of these processors. In sum, the thesis contributes to both literature and methodology. Results showed that the tea processors were environmentally inefficient, recording a mean efficiency index of only 49%. Factories have the ability, therefore, to reduce 51% of detrimental environmental inputs without compromising output. Fortunately, efficiency was on an upward trajectory, rising from 29.4% in 2014 to 36.8% in 2016. Further, environmental efficiency affected the profitability of these processors. Results showed a negative effect of environmental efficiency on profitability. Worth noting, 81.3% of factories that had good environmental performance (0.8-1.0) had low profitability, ranging from -0.25% to 1.23%. Factories that were environmentally efficient had a 0.7% lower chance of being profitable. For the second objective, the technical efficiency level derived from the regional frontier was 76%, while that from the meta-frontier was 74%. The technological gap ratio was 97%. Thus, input costs could be reduced by 24% without compromising the potential output. The overall persistent inefficiency for the pooled sample was about 20%, with a residual inefficiency of about 5%. This implies that structural and managerial aspects were involved in the greater inefficiency of the smallscale tea processors. No significant relationship between technical efficiency and profitability was observed. For the third objective, the total Emergy for the purchased non-renewable resources was 93.4%, purchased renewable resources registered 6.3%, and renewable resource was 0.3%. Results showed that the small-scale tea processors relied heavily on purchased non-renewable resources, hence rendering the processing subsystem ecologically/economically unsustainable. The results further showed that the small-scale tea processing sub-systems were profitable, with an average economic output/input ratio of about 2.5. The policy implication of these findings is that the government should offer incentives for the adoption of improved environmental technologies. For example, offering a tax subsidy for new technologies adopted should be considered. For the small-scale tea processors’ management, they should seek alternative sources of finance that are cheaper or negotiate for better terms of borrowing with the financiers. In addition, the processors might consider automating some factory processes and incorporate the use of renewable energies, for example, solar power and gasifiers. Further, they may consider issuing a green instrument that simultaneously reduces the cost of capital and ecological impact.Item Effect of Government Regulations on Factors Hindering Financing of Small Scale Water Investments in Kenya(Jomo Kenyatta University of Agriculture and Technology, 2015) Kimani, Maina E.In Kenya, most water utilities have been publicly owned and managed. These utility firms have thus been getting financial support from the government in form of subsidies in addition to the revenue they generate internally. However there has been low level of investment in peri-urban areas by both public and private players creating an investment opportunity. Nevertheless this opportunity is not taken up by small scale water investors hence water scarcity. Many people in these areas do not have access to basic water. The general objective of the study was to determine the effect of government regulations on factors hindering financing of small scale water investments in Kenya. Specific objective of the study was to determine whether cost recovery, investor‘s perceived risk, access to capital and return on investments affect financing of small scale water investments in peri-urban areas in Nairobi Kenya. The study adopted cross-sectional survey research design. A two stage sampling technique was used to obtain a sample population of 150 Small Scale Water Service Providers (SSWPs). The study utilized self-administered semi-structured questionnaire and content analysis for collecting data. Structural Equation Modelling (SEM) and Moderated Multiple Regression (MMR) analysis was used to analyse the relationship between predictor variables and financing of small scale water investments. The findings of the study indicated that government regulation moderates the relationship between predictor variables and financing of small scale water investments. It was recommended that cost recovery should be improved, investor‘s risks should be mitigated and capital should be made available. In order to improve return on investments of small scale water investments, the government should enhance tariff reviews. The results of the study will contribute to greater understanding of various financial constraints that small scale water investors go through in trying to make water accessible to peri-urban population.