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Effects of financial risk management on the growth of microfinance sector in Kenya

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dc.contributor.author James, Njuguna
dc.contributor.author Rosyln, Gakure
dc.contributor.author Anthony, Waititu
dc.contributor.author Katuse, Paul
dc.date.accessioned 2015-09-21T14:09:15Z
dc.date.available 2015-09-21T14:09:15Z
dc.date.issued 2013
dc.identifier.uri http://erepo.usiu.ac.ke/11732/732
dc.description.abstract Growth of Microfinance Sector (MFIs) in Kenya is exposed to various risks which originate from both the internal and external environment. Financial risks which threaten their financial viability and long-term sustainability. The purpose of this study was to establish the effect of financial risk management strategies on the growth of microfinance sector in Kenya. A sample of seventeen (17) MFIs was selected using the random sampling using the random sampling approach from the population of fifty seven (57). The study adopted a correlation survey research design. A questionnaire and an interview schedule were the main data collection tools. The preferred statistical tool for quantitative data analysis was Statistical Package for Social Sciences (SPSS) computer software. Qualitative data was analyzed using content analysis. The study utilized descriptive and regression analysis to determine the relationship between financial risk management strategies and growth of MFI. The study results were that financial risk management strategies were a significant determinant of growth in MFIs. The findings indicated that MFI had effective financial risk management strategies. This finding was informed by results which indicated that MFIs had put in place effective credit risk management practices, liquidity risk management practices, interest risk management practices and price risk management practices. The study recommended that the MFIs to continue practicing effective financial management practices such as hedging (options and forwards), loan size limits, standardized (simple) loan terms, zero tolerance on delinquency, group-based lending, maintain detailed estimates of projected cash flows for the next weeks or months so that net cash requirements can be identified unexpected increases in cash needs and maintaining investment accounts that can be easily liquated into cash or lines of credit with local banks to meet unexpected needs en_US
dc.publisher Prime Journal of Business Administration and Management (BAM) ISSN: 2251-1261. Vol. 3(6), pp. 1064-1069, June 26th, 2013 en_US
dc.title Effects of financial risk management on the growth of microfinance sector in Kenya en_US
dc.type Article en_US


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