Finance

The study focused on the effect of liberalization of banking industry. In the past three years Kenyan banking sector has progressed towards increasing retail banking and decreasing the corporate banking. This is evident in the efforts banks are putting to attract retail customers through advertisements and sales promotions. Retail banking in Kenya in the past years had been severely underdeveloped and marginalized, since the majority of Kenyans live below the poverty line and cannot afford the luxury life. The study therefore established the effect of retail banking on the performance of financial institutions in Kenya. The general objective of the study was to determine the effect of retail banking in the performance of financial institutions. The study was guided with the following specific objectives; lending portfolio, number of customers, branch network and deposit mobilization. The study relied on both primary sources and secondary sources. The primary sources were the operation Managers, retail managers and relationship managers of the financial institutions while the secondary sources included reviewing the literature on the banking sector in Kenya and the East Africa region, previous research carried out from the same field, annual reports regarding the industry and official company manuals. The data collection methods included questionnaires and interviews. The collected data was edited and then coded. Data was analyzed using descriptive and inferential statistics with the aid of Statistical Package for Social Sciences (SPSS) Version 22.0. Descriptive statistics included, frequencies, percentages, means and standard deviations. On the other hand, inferential statistics was in form of both Pearson’s correlation coefficient and multiple regression. Correlation facilitated drawing of infrences on relationship between each of the independent variables. Multiple regression enabled assessment of the effect of the independent variables on savings mobilization performance as a whole significance. The study findings concluded that Deposit Mobilisation, Lending Portfolio and Branch Network were found to have a significant and positive impact on financial performance; it would be wise to conclude that Deposit Mobilisation, Lending Portfolio and Branch Network were found to have a strong positive relationship. On the number of customers on financial performance, the study established that Number of Customers has an insignificant relationship with financial performance. It was recommended that commercial banks should design other innovative marketing strategies which can increase the level of low cost deposits such as use of mobile phone in collecting deposits. The Management of commercial banks should put in place strategies that focus on unbanked population since they represent a significant number of customers left out which can build trust on and sustain its performance once they are included in the financial sector. The study further recommends that in- order to enhance the performance in the whole financial sector, the same study can be carried out in micro finances.

In financial monitoring, instead of direct control of prices and conditions of the insurance company contracts, financial indexes and financial strength of these companies is evaluated. Solvency margin is a tool used by many advanced companies for financial monitoring that represents the excess of assets than liabilities. Or we can say the financial ability of the insurance company to cover its accepted risks. So far, the world's different systems using different methodologies are designed and implemented to evaluate solvency of insurance companies. In this paper, using the criteria identified in the literature, while comparing the insurance industry's financial monitoring system in Iran with other systems - solvency II and the united states RBC- we make recommendations to improve the solvency formula defects of insurance industry in Iran.

This study examines the responsiveness of inflation to monetary policy in Nigeria. The specific objective was to determine empirically the extent to which monetary policy had helped in achieving general price stability in Nigeria within the chosen scope. Data for the study were obtained from secondary sources. The ordinary least square, Augmented Dickey Fuller (ADF) unit root test, Johansen Co-integration test, as well as parsimonious Error Correction Mechanism method were adopted to analyse the data. The results revealed that the impact of regulatory instrument on inflation was relatively low indicating that monetary policy was not a good predictor of inflation rate in Nigeria. Results also revealed non-stationarity at level form rather stationary after first differencing; and integrated at order one 1(1). Further revelations indicated that a long-run relationship existed among the variables and showed the presence of one co-integrating vector in the model. The study offers some important policy implication: the government should compliment monetary policy with fiscal policy to attain macro-economic objectives, diversifying the economy and encourage local productivity to stabilize prices.

The purpose of this study was to find out the effect of strategic management practices on customer retention in Commercial Banks in Kenya. Specific objective formed the basis of the study namely: To establish the effect of, strategic corporate governance practice on customer retention in the commercial banks in Kenya and the theory used was Agency theory. The total number of banks registered with the Central Bank of Kenya is forty-three (43) hence a survey method was used. The questionnaires were distributed to all banks and the managers and the department heads were requested to fill in. The total numbers issued was 123 questionnaires and 117 were returned, giving a response rate of 86%. The questionnaires were coded and fed into the SPSS. The data was then analyzed using descriptive statistics such as mean and standard deviation. Inferential statistics was used including ANOVA, correlation, multiple regression method. Qualitative data was used to put into categories based on themes that would be aligned to research objectives and would be integrated in the discussion of the findings. The findings of the study show that strategic corporate governance practice were significant on Customer Retention. Therefore, it was concluded that to increase customers the strategic management practices must be adopted. Banks should ensure that strategic corporate governance practice become their watchword. This will enhance efficiency and profitability and encourage an environment for the cultivation of other attributes of corporate governance. It should also promote accountability, transparency, healthy ethics, integrity and participation of stakeholders. Internal discipline and a strong operational agenda rooted in corporate governance, strong leadership, strengthened by moral questions bordering on integrity to carry out functions as appropriate should be put in place. This study gave managers invaluable; insights on how to plan allocate and enhance capabilities in ways that allowed them to achieve commercial banks objectives in dynamic and competitive environment using strategic management practices and customer retention strategy. Therefore, since strategic management practice could be of value, they were well advised to pursue customer retention as well as at a suitable level of strategic management practices

Internet banking has made drastic changes in the banking system of India. The Indian banking with its large network provides various kinds of E-Banking services to the customer. Now a day’s most of the banking transaction happens through E-touch. E-Banking is modernizing the whole system of the bank with the aid of technology. Though the bankers as well as the customers were facing some initial hitch with the introduction of E-Banking, later stages the country has witnessed a wide spread acceptance of technology for banking. The SBI and ICICI banks plays very crucial role in banking industries. The paper attempts to give an insight on various E-banking services and the latest development in E-Banking for the period of 2010-11 to 2015-16. The paper also focuses on the challenges faced by banking industry in adopting the E-banking with the help of IT.

The role and importance of Mutual fund institutions is widely appreciated and acknowledged and the Kenyan government has increased emphasis on fund mobilization through legislations which gave birth to Mutual funds. Despite the significant role played by Mutual funds in Kenya, their growth is relatively low. This research seeks to assess the effect of financial innovation on growth of mutual fund institutions listed in NSE. The research adopted a descriptive survey research design. The study targeted 61 funds/ units operating under 18 listed fund institutions in 2016. The sampling technique used is stratified random sampling to ensure that each fund type is proportionately represented in the sample. Secondary and primary tools were used to supplement data collected. Reliability and validity tests were conducted to test the quality of data collected. Inferential statistics were done to identify the relationship between financial innovation and growth of mutual fund institutions listed in NSE. The study results indicate financial innovation has significant and positive influence on the growth mutual fund institutions listed in NSE. The study indicated that 17.8% explains the relationship between financial innovation and growth of mutual fund institutions linked with Return on investment while 46.3% explains financial innovation and growth of mutual fund institutions linked with assets under management

The study aimed to examine financial factors affecting lending portfolio in commercial banks in Kenya. The specific objectives of this study were: to determine the effects of interest rates on the lending portfolio of commercial banks in Kenya; to establish the effect of deposit mobilization on the lending portfolio of commercial banks in Kenya; to assess the effect of collateral on the lending portfolio of commercial banks in Kenya; and finally determine the effect of loan repayment on the lending portfolio of commercial banks in Kenya. The study was based on Liquidity Preference Theory (LPT), Loanable Funds Theory and The Theory of Interest. The study used a cross sectional survey research design administered through questionnaires. The heads of credit related departments who are concerned with policies implementation in 43 commercial banks in Kenya formed the target population. The sample population of the study was 64 respondents. The mean, standard deviation, correlation and regression were the main statistical analysis used. It was found that interest rate had a negative correlation with lending portfolio. Deposit mobilization, which is the source of funds for the banks, had a positive effect on the lending portfolio. Emphasis on collateral requirements had a negative effect on amount of loans but increased the quality of the loans lent out (low risk of default). Finally it was found that loan repayment policies had a positive significant effect on the lending portfolio. It was concluded that unfavourable (high) interest rate reduces lending portfolio. Effective deposit mobilization strategies increases lending portfolio. Loan repayment policies increase the lending portfolio. Finally, collateral requirement increased the chance of loan repayment thus increasing the quality of lending portfolio. Consequently it was recommended that the stakeholders, especially the government to implement economic strategies that spars economic growth. The economic growth as multiplier effect in that it does not only empowers the citizens financially, it also reduces the interest rate of bank loans. There should be effective assessment mechanisms of potential borrowers so as to have appropriate collateral requirement for an individual borrower. Finally it was recommended that a complementary study that examines the causes of non-repayment in commercial banks will be ideal. This study also proposed another study be carried out that investigates the direct role of lending portfolio on bank’s financial performance.

Participatory Notes are offshore derivative instruments (ODIs) issued, by SEBI-registered Foreign Institutional Investors (FIIs) in India, against an underlying security, which entitles the holder to a share in the income, either dividend or capital gain, from the underlying security. These are issued to foreign investors, which may be hedge funds, foreign pension and mutual funds, or other High Net worth Individuals abroad. They are issued outside of India to people outside of India. The underlying securities, shares of listed companies in India, are held in the custody of FIIs on behalf of the P-Note holders.There are several issues associated with P.Notes. The anonymity of investors-difficulty in fulfilling KYC (Know Your Client) and FTAF (Financial Action Task Force) norms for P-Notes, the Anti-Money Laundering issues and difficulty in tracing the identity of the funds, Lack of transparency and anonymity worries the government authorities. There are fears that P-Notes are ideal money-laundering vehicles. Some reports suggest that some FIIs created their own separate and parallel offshore market for Indian securities in derivative form-which will develop and this will take volumes and revenues from our markets. About 50% of the portfolio inflows into India come in the form of P-Note There are some apprehensions, and some evidence, that the P-Note route was being used for “round-tripping” resident Indians’ money-going out by questionable means and coming back through the P-Note route. It is in light of these features the paper analysis the various issues related with P. Notes.

According to traditional financial theory, the world and its participants are, for the most part, rational "wealth maximizers". However, there are many instances where emotion and psychology persuade our decisions, causing us to act in irregular or irrational ways. Behavioral finance is a rather new area that seeks to combine behavioral and cognitive psychological theory with conventional economics and finance to provide explanations for why people make irrational financial decisions. There are some irregularities that conventional financial theories have failed to explain. And what are the original reasons and biases that cause some people to behave irrationally and often in opposition to their top benefits. When using the labels "conventional" or "modern" to describe finance, we are talking about the type of finance that is based on rational and logical theories, such as the capital asset pricing model (CAPM) and the efficient market hypothesis (EMH). These theories assume that people, for the most part, behave rationally and predictable in making decisions.

This study investigated the relationship between inventory management and the financial performance of quoted manufacturing firms in Nigeria. The study employed longitudinal research design. Longitudinal design involves repeated observations of the same variables over long periods of time which helps the researcher to be able to detect changes in the variables of interest. The population of the study covers all quoted manufacturing companies listed on the Nigerian Stock Exchange from 2011- 2015. However, a sample of 23 manufacturing companies was drawn from the companies listed in the Stock Exchange for the period 2011-2015. The study utilizes the Pooled Ordinary Least squares (OLS) and the Generalized Least squares (GLS) regression estimation. The use of the Pooled OLS is based on the fact that it is a simple way to examine the sensitivity of the results to alternative specifications and allows for greater flexibility in modelling differences in sample specific behaviour. Findings revealed that finished goods inventory, inventory turnover, inventory conversion period and ram material inventory all have a positive effect and also statistically significant at 5% level while work-in- progress cost is not significant. The Inventory turnover is positive (0.6634) and statistically significant at 5% level (p=0.0014) which implies that the higher the inventory turnover, the higher the level of profitability. Specifically, a 1% increase in inventory turnover results in about 66.3% increase in profitability and vice-versa. While the inventory conversion period (ICP) is negative (-0.3962) and statistically significant at 5% level (p=0.0014) implying that delays in inventory conversion affects profitability negatively. Specifically, a 1% delay in inventory conversion will result in 39% decrease in profitability. The study therefore, recommends that; manufacturing companies should improve their inventory turnover ratio as this has been observed to have a positive impact on profitability. Companies can do this by using sales discounts, marketing campaigns and total product improvements. There is also the need to improve the rate of inventory conversion by eliminating delays in the conversion process as delays have been found to adversely affect profitability.