Effect of Government Regulations on Factors Hindering Financing of Small Scale Water Investments in Kenya
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Date
2015
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Publisher
Jomo Kenyatta University of Agriculture and Technology
Abstract
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.
Description
A thesis Submitted in Partial Fulfilment for the Degree of Doctor of
Philosophy in Business Administration in the Jomo Kenyatta
University of Agriculture and Technology