European Academic Journal - I

EFFECTS OF DIGITAL CREDIT PROVIDERS ON FINANCIAL INCLUSION OF LOW-INCOME YOUTH IN NAIROBI AND THE NEED FOR GOVERNMENT REGULATION

Wesley Okoth Otieno, Nicholas Njunji Thuo — Mon, 25 Nov 2024 00:00:00 +0000

This study researched on the effects of Digital Credit Providers (DCPs) on financial inclusion among the low-income youth in Nairobi, Kenya, and the need for Government regulation in the sector. The study was guided by three dependent variables and one moderating variable. Employing a descriptive research design and quantitative methodology, the study collected data from 380 participants from ten wards in Nairobi drawn from a youth population of 338,669 from the same wards. The data analysis employed descriptive statistics on frequency distributions, means, and standard deviations to analyse the direct effects of DCPs on financial inclusion, the positive and negative impacts/ spillover effects of DCPs, and justification for Government regulation. The findings revealed male youths aged between 18 to 25 years were predominately engaged in digital borrowing to meet their day-to-day and lifestyle needs. Respondents largely perceive digital credit providers as catalysts for improved financial inclusion, especially for youth marginalized by traditional banking systems. Additionally, many youth respondents acknowledged positive impacts such as increased access to financing, employment opportunities, and enhanced financial autonomy as some of the effects of digital credit. One negative impact, the study identified punitive cost of credit, punitive cost of default, moral hazard, and over-indebtedness as the negative impact of digital credit among low-income youth. A significant portion of respondents held multiple digital loans, with many listed in Credit Reference Bureaus (CRBs) due to defaults while others reduced their spending and borrowed from family and friends to repay digital credit. Finally, the study advocates for government regulation to safeguard consumers from potential exploitation by DCPs, improve data protection and transparency and promote sustainable financial inclusion. Whereas non-regulation or regulatory gaps may favour DCPs, they can expose youths in Nairobi to financial exploitation by the DCPs and reliance on debt to survive and meet their personal needs. Government regulation and supervision are important to establish minimum standards ensuring consumer protection, and ways of working, and provide legal recourse to aggrieved youth customers. The study also contends that regulatory frameworks should be flexible to accommodate digital credit technology advancements and the development of products for diverse consumer needs, thereby promoting responsible lending practices and financial inclusion.

Impact of Mergers and Acquisition on Financial Performance of Commercial Banks in Kenya (A Survey of Commercial Banks in Kenya)

Okoth Wesley Otieno, Caroline Biwott Jepkosgei — Mon, 25 Nov 2024 00:00:00 +0000

The aim of this study was to analyze the impact of Mergers and acquisition on financial performance of commercial banks, a comparative study of pre and post-merger financial metrics. The study was guided by three specific research questions: What are the effect of mergers on liquidity of commercial banks; What is the market share of commercial banks after merger? What are the risk diversification on financial performance after merger? The descriptive research design was employed for this study and the target population for comprised of banks in Kenya that have undergone mergers and acquisitions (M&A). These banks form the foundation of the research focus, as their experiences provided valuable insights into the impact of M&A on financial performance. The chosen data collection tool for this study is a questionnaire, a widely adopted instrument aligning seamlessly with the research objectives and the unique characteristics of the target population. Descriptive statistical measures, including mean and standard deviation, was employed to provide a comprehensive overview of the central tendencies and variability within the data. Correlation analysis was conducted to explore the relationships between different variables. Multiple regression analysis was employed to assess the impact of mergers on financial performance. The paired sample t-test was employed to evaluate the impact of a merger on three vital financial indicators: liquidity, market share, and risk diversification. The statistical analysis revealed significant improvements in each domain after the merger, shedding light on the tangible effects of the consolidation. Starting with the Liquidity Assessment, the pre-merger mean liquidity score of 2.914 (SD = 0.3079) saw a notable increase to 3.937 (SD = 0.3059) post-merger. The paired t-test yielded a highly significant result (t = -13.022, df = 34, p = 0.000), indicating a substantial improvement in liquidity. This outcome emphasizes that the merger positively impacted the organization's ability to meet short-term obligations and manage cash flows more effectively. Moving on to the Market Share Evaluation, the pre-merger mean market share of 2.994 (SD = 0.3514) experienced a remarkable surge to 3.977 (SD = 0.2901) post-merger. The paired t-test result (t = -14.392, df = 34, p = 0.000) highlighted a significant and consistent improvement in market share. This suggests that the merger had a positive and meaningful influence on the organization's competitive standing within the industry. In terms of Risk Diversification Analysis, the pre-merger mean risk diversification score of 3.006 (SD = 0.4014) witnessed a robust advancement to 3.977 (SD = 0.3623) post-merger. The paired t-test (t = -9.574, df = 34, p = 0.000) indicated a significant enhancement in risk diversification, emphasizing the positive impact of the merger on the organization's ability to manage diverse risks effectively.

EFFECT OF WORKING CAPITAL MANAGEMENT ON FINANCIAL PERFORMANCE OF MANUFACTURING FIRMS LISTED AT THE NAIROBI SECURITIES EXCHANGE

Okoth Wesley Otieno, Gandhi Sokoine Lenaituriai — Mon, 02 Dec 2024 00:00:00 +0000

This research aimed to help manufacturing companies listed on the National Stock Exchange (NSE) better understand how working capital management affects their bottom lines. The accounts payable and receivable and cash conversion cycle were the independent variables in this study. The return on investment is the dependent variable. The specific objectives are to learn how the financial performance of manufacturing companies listed on the NSE is impacted by the following: accounts receivable, accounts payable and cash conversion cycles. The study used the following theories: transaction cost theory, operational cycle theory, and cash conversion cycle theory. The survey included nine manufacturing firms listed on the NSE. The examination was conducted using a descriptive research approach. This study utilized audited financial statements as secondary data. These statements may be found on the websites of the individual companies, in the Capital Market Authority library, and the NSE library. The study used SPSS to do a linear regression analysis on the collected data. The data was presented via graphs and tables. The study findings included: A positive correlation of 0.0259 was established between Accounts Receivable and Return on Assets, An inverse correlation of - 3.369was established between Return on Assets and Accounts Payable and a positive association of -6.988Ewas established between CCC days and ROA, nevertheless. A unit increase in CCC days increases ROA by -0.520.The study made the following recommendations: manufacturing firms listed in the NSE should maintain a high standard of efficient effectiveness in accounts receivable management, Management should proceed with caution when reducing the debtors' days, even though doing so would boost profitability by shortening the accounts receivable collection period and businesses analyze their cash conversion cycle, which is influenced by factors such as inventory turnover, payables days, and debtor days. CCC may not have a major impact on financial performance, as shown by the study, but management still shouldn't neglect it because profits aren't the only goal of the firm. The study recommended that additional research is required to replicate this study over a longer time frame, say, ten to twenty years.

Condom consumption: a cross-analysis using Herbert Simon, Pierre Bourdieu, Freud, and other socio-economic and psychoanalytical theories

Diletta Cerasuolo — Thu, 14 Nov 2024 00:00:00 +0000

This essay showcases the consumption of condoms through three different consumer behaviour perspectives, namely economic, social and psychoanalytical. Each perspective will be addressed via a specific school of thought; the economic through Herbert Simon’s concept of bounded rationality, the social through Pierre Bourdieu’s capital theory, and lastly the psychoanalytical through Freud’s principles of the ego. The same analysis is done afterwards on other consumption situations; the use of different theories will demonstrate which perspective is best matched to certain consumptions. According to the findings that will follow it is evident that condoms consumption is best explained via Freud’s theories.

THE IMPACT OF DIGITAL MARKETING ON E-COMMERCE BUSINESSES PERFORMANCE IN NAIROBI CITY, KENYA

Wesley Okoth Otieno, Eddah Otundo Omariba — Mon, 25 Nov 2024 00:00:00 +0000

This research explored the impact of digital marketing strategies on the performance of e-commerce businesses in Nairobi City, Kenya. Grounded in the Technology Acceptance Model (TAM) and the Diffusion of Innovations Theory, the study aimed to understand how various digital marketing tools influence business outcomes in the e-commerce sector. A descriptive research design was employed, targeting a diverse range of e-commerce businesses in Nairobi. Stratified random sampling ensured a representative sample across different business sizes and sectors. Data was collected through structured questionnaires and interviews, with a pilot test conducted to ensure the reliability and validity of the data collection instruments. The digital marketing strategies investigated include social media marketing, content creation, search engine optimization (SEO), and the use of artificial intelligence (AI) and chatbots. The conceptual framework visualizes the interaction between these strategies and e-commerce business performance, focusing on metrics such as customer engagement, brand visibility, conversion rates, and customer loyalty. Empirical literature underscores the significance of digital marketing in enhancing business performance. Studies highlight the role of social media in building brands and engaging customers, the effectiveness of content marketing in driving traffic, the importance of SEO in improving online visibility, and the potential of AI in personalizing marketing efforts and enhancing customer service. Despite the extensive research, gaps remain in understanding the long-term effects of digital marketing strategies and their combined impact across different contexts. This study sought to address these gaps by providing a comprehensive analysis of integrated digital marketing strategies and their influence on e-commerce performance in Nairobi City. Ethical considerations were prioritized, with informed consent obtained from all participants and ethical clearance secured from relevant authorities. Data analysis involved statistical techniques to test the hypotheses and derive meaningful insights. The findings of this study are anticipated to contribute to academic knowledge on digital marketing and offer practical recommendations for e-commerce businesses looking to leverage digital tools for improved performance. The research highlighted the crucial role of digital marketing in driving growth and customer loyalty in the e-commerce sector, offering valuable insights for businesses aiming to optimize their digital marketing efforts.

IMPACT OF MOBILE BANKING ON FINANCIAL INCLUSION IN RURAL MWANZA REGION IN TANZANIA

Okoth Wesley Otieno, Joane Edward — Mon, 25 Nov 2024 00:00:00 +0000

This study focused on the impact of mobile banking on financial inclusion in Magu district, Mwanza region. The objective of the study was to understand the determinants and effects of financial institution’s penetration on the use of mobile accounts and services as opposed to in-branch official banking services. The study focused on three objectives which are to identify social-economic determinants of the use of mobile banking services compared to official banking services users only, to understand the impact of financial penetration of the institution on the use of mobile banking services, and to suggest recommendations that might be inevitable to increasing levels financial inclusion through use of mobile banking. The study used data sample drawn from the Magu district population from Kisesa Ward. The sampling procedure to be used is the random sampling that increases accuracy and precision of the data to be used. Findings showed that individuals mostly use mobile banking for sending and receiving money from one place to another, and it is not used for mobile banking payments such as buying airtime from a mobile bank account directly or payment of other bills. Furthermore, education level and the income status of the head of household, had a significant positive effect on financial inclusion.

EFFECT OF TAXATION ON PERFORMANCE OF MEDIUM-SIZED ENTERPRISES IN KAJIADO COUNTY, A CASE STUDY IN KITENGELA TOWN, KAJIADO EAST WARD

Okoth Wesley Otieno, Paul Ondoo — Mon, 25 Nov 2024 00:00:00 +0000

This study examined the effect of taxation on the performance of medium-sized enterprises in Kitengela Town, Kajiado County. The study sought to address the following specific objectives; to determine the effect of Value Added Tax on the performance of medium-sized enterprises in Kajiado County, to evaluate the effect of Income Tax on the performance of medium-sized enterprises in Kajido County and to assess the effect of Excise tax on the performance of medium-sized enterprises in Kajiado County. The study was anchored on three theories; Ability-To-Pay theory; Benefit Theory of Taxation and Kaleckies Theory of Taxation. The research adopted cross-sectional research design. The target population of this study comprised of 1,229 MEs. Simple random sampling was used to select the sample size of 302 from the different business/activity sectors. This study used questionnaires with fixed choice formats, as well as interviews as the main data collection instruments. A pilot study was undertaken on 30 of the respondents to test the reliability and validity of the questionnaire. Quantitative data were analyzed using SPSS version 25 where relationships between the variables were assessed using correlation and regression analysis. Quantitative data were analyzed using SPSS version 25 where relationships between the variables were assessed using correlation and regression analysis. The study found out that there was a positive and significant relationship between Value Added Tax and performance of MEs. Further, the results revealed that there was a positive and significant relationship between Income Tax and performance of MEs. Lastly, there was a positive and significant relationship between Excise Tax and performance of MEs. Based on the findings, the study concluded that Value Added Tax, Income Tax and Excise Tax have a positive and significant effect on performance of MEs. The study recommends that as a broad-based tax on final consumption, VAT regimes must determine whether, or the extent to which, the purchase should be treated as acquired for business purposes or for private consumption. To eliminate the tax burden among MEs brought about by income tax, policy makers should extend exemption to transactions necessitated by regulatory changes, compulsory government acquisitions and internal restructures considering that such transactions are rarely undertaken for a commercial gain. Excise tax should be developed in such a way that it would stimulate rather than stop the development of entrepreneurship.

From "Do No Evil" to "Can't Do Evil" AI-Enhanced Blockchain Technology as a Transformative Paradigm for Kenya, Addressing Finance, Corruption, and Voter Fraud.

James Mulli — Sun, 24 Nov 2024 00:00:00 +0000

This paper explores the transformative potential of integrating blockchain and artificial intelligence (AI) technologies to address critical challenges in governance, finance, and voter integrity in Kenya. Blockchain, with its immutable and decentralized ledger system, offers unprecedented transparency and accountability, while AI enhances its effectiveness through data-driven insights, fraud detection, and resource optimization. Together, these technologies have the capacity to combat systemic corruption, streamline public services, and foster trust between governments and citizens. A transformation from "do no evil" to "can't do evil".

Through real-world applications such as secure land registries, efficient tax collection, healthcare supply chain management, and tamper-proof voting systems, the synergy between AI and blockchain demonstrates significant promise for addressing governance inefficiencies. The paper also examines successful international case studies, highlighting Kenya’s potential to adopt similar innovations to promote economic growth and societal resilience.

Despite challenges like regulatory hurdles, technical complexity, and user adaptation, AI can provide solutions that enhance blockchain compatibility, simplify integration with legacy systems, and deliver targeted training for stakeholders. This combination not only addresses Kenya’s current governance and corruption issues but also lays the foundation for a leapfrog effect in political, social, and economic development paradigms. By embracing this technological synergy, Kenya can establish itself as a leader in innovation-driven reform, setting a global example for transparent and equitable governance.