International Journal of Finance and Accounting

The Implications of Online Banking on Financial Inclusion in Banking Institutions: A Literature Review

Edison Gakuru — 2025-01-07

The study aimed at understanding the implications of online banking on financial inclusion in banking institutions: A literature review on challenges and opportunities. It presents the challenges and opportunities of online banking globally. This study utilized a literature review approach. A comprehensive search was conducted across various academic databases, including Web of Science, Scopus, Dimensions, Google Scholar, and JSTOR, yielding a total of 563 documents. The search was performed using keywords such as “online banking,” “financial inclusion,” “digital banking challenges,” “financial inclusion opportunities,” and “banking institutions.” Boolean operators (e.g., “AND,” “OR”) were used to refine search results and retrieve relevant literature. After filtering, 31 documents were selected for in-depth review based on relevance to the study’s objectives, as evidenced in the reference section. This was after the inclusion and exclusion criteria to ensure the selection of pertinent literature. It was revealed that online banking has transformative potential to advance financial inclusion by making financial services more accessible and affordable. However, it faces challenges that can hinder its impact, including limited digital literacy, high transaction fees, and inadequate infrastructure in certain regions. Therefore, financial institutions should also work to reduce transaction costs and simplify online banking interfaces to accommodate users with low digital skills. Collaboration with financial firms could provide innovative solutions to these issues and improve service delivery

Risk Management Policies and the Financial Performance of Commercial Banks in Mbale City

Mankind Sam Wasike — 2025-03-11

The effect of risk management practices on the financial performance of commercial banks in Mbale City, Uganda, is investigated in this study. Effective risk management plays a fundamental role in safeguarding financial institutions against market volatility, credit defaults, operational disruptions, and liquidity crises. Banks face various risks that, if unmanaged, can lead to significant financial distress and erosion of profitability. The objectives were to evaluate the specific types of risk that affect banks’ financial performance and analyse the relationship between risk management policies and the banks' financial performance. To examine the challenges of implementing risk management policies that affect the banks' financial performance in Mbale City, measured through key financial indicators like Return on Assets (ROA), Return on Equity (ROE), and Non-Performing Loans (NPLs) in Mbale City. A mixed-method research design was adopted, where quantitative and qualitative approaches. Statistical analysis was used to establish correlations between risk management policies and financially stronger financial resilience during periods of market uncertainty. These performance indicators, while thematic analysis helped interpret insights from the interviews. The findings reveal that banks with robust and proactive risk management policies tend to experience better financial outcomes. Precisely, the study found that credit risk management was highly correlated with lower levels of Non-Performing Loans (NPLs), while liquidity risk management was associated with higher levels of stability and profitability. Also, banks that invested in advanced technological systems for risk assessment and management showed research highlights the importance of successively improving risk management frameworks to familiarize with the varying financial landscape. It is recommended the adoption of dynamic risk assessment tools, enhanced regulatory compliance, and regular training of staff involved in risk management processes. Finally, it highlights that effective risk management is not only a regulatory requirement but also a critical factor for ensuring sustained profitability and competitive advantage.

Effects of Capital Adequacy on the Financial Performance of Listed Commercial Banks at the Nairobi Security Exchange, Kenya

Aletia E. Sylvia — 2025-03-14

The study's main focus was on the effects of capital adequacy on the financial performance of listed commercial banks at the Nairobi Security Exchange, Kenya. The study was based on signalling theory. A descriptive research design was employed. The study targeted 11 commercial banks listed at the Nairobi security exchange, where the census sampling technique was adopted. Secondary data was sourced from commercial bank statements and annual reports published in NSE between 2018 and 2022. The study presumed that data obtained from published annual audited reports provided quality data, which addressed the study's validity issue. To enhance reliability, a pilot study was carried out on two commercial banks that were not listed at the Nairobi security exchange, and they were selected randomly. The data was analyzed using descriptive analysis, regression analysis, and correlation analysis, where the significance level was tested at 5%. The findings revealed that capital adequacy had a strong and positive effect on Return on assets, and its p-value was < 0.05. The study recommends that banks should seek to increase their asset to boost their growth and maintain reasonable capital adequacy to absorb losses effectively

Assessment of the Impact of Credit Risk on the Financial Performance of Listed Commercial Banks in Tanzania

Meinyali Mevaashi Sabore — 2025-04-09

This study explored the impact of various financial and risk management factors on the financial performance of commercial banks in Tanzania between 2017 and 2024. Specifically, the research addresses four primary questions: To what extent do non-performing loans (NPLs) affect the financial performance of commercial banks in Tanzania? What is the effect of capital adequacy on financial performance? How does a firm's size impact financial performance? And what is the impact of the debt-to-equity ratio on financial performance? The study employed a descriptive research design; the study utilized secondary data sourced from annual reports of the listed commercial banks. Descriptive statistics, correlation analysis, and multiple regression were used to analyze the data, but because panel data were used, the Hausman test was also used to decide whether or not the use of a random effect model or a fixed effect model would yield more accurate results. The analysis focuses on the effects of NPLs, capital adequacy ratio (CAR), firm size (F_SIZE), and debt-to-equity ratio (DER) on return on equity (ROE). Findings have revealed a non-significant positive relationship between NPLs and ROE, suggesting that factors beyond NPLs predominantly influence profitability. Firm size exhibits a marginally positive yet inconclusive impact on ROE, while DER demonstrates complex leverage effects. Additionally, CAR shows a negative but insignificant effect on the balance between financial stability and profitability. The research highlights the importance of addressing credit risk management within the Tanzanian banking sector, given its unique regulatory and economic challenges. Recommendations include adopting advanced credit risk assessment tools, improving asset quality management, effectively leveraging economies of scale, and implementing regulatory reforms to foster innovation and strengthen risk management. These strategies are aimed at improving the financial resilience and sustainable growth of commercial banks in Tanzania's competitive financial landscape

Moderating Role of Legal Framework on the Effect of Resource Mobilization Reforms on Financial Performance of County Governments in Kenya

Titus Kiplangat Kemboi — 2025-05-05

This study examined the effect of resource mobilization reforms on the financial performance of county governments as well as how legal frameworks could moderate this relationship. The study was grounded on New Public Management theory. The research followed a positivist research philosophy and utilized a correlational research design. The target population was the 47 county governments in Kenya which were clustered into seven regional blocs. A county with the least budget absorption rate as per the controller of budget report of 2023 was picked per regional bloc. The top and middle-level management employees in the Department of Finance and Economic Planning were selected resulting in 229 target respondents upon which a sample size of 144 was determined based on Krejcie and Morgan. A pilot study was carried out to determine the reliability of the instrument. Data was analyzed using SPSS Analysis of Moments Structure (AMOS), employing principal component analysis and confirmatory factor analysis to evaluate the associations between latent variables. Structural equation modelling was undertaken to evaluate any inherent relationship between the study variables. Results revealed that resource mobilization reforms had a statistically significant effect on the financial performance of county governments (β=0.566, t=3.390, p<0.05). Legal framework also had a significant moderating effect on the relationship between resource mobilization reforms and this performance (β=0.189, t=2.283, p<0.05). The study concludes that resource mobilization reforms are a driver of devolved governments in Kenya. Improving such performance therefore calls for additional reforms focusing on mobilizing more resources.

Foreign Investor Participation Reforms and Securities Market Performance in Kenya

Kipkemoi Cheruiyot — 2025-05-07

This study investigated the influence of foreign investor participation reforms (FIPRs) on securities market performance in Kenya. It employed an exploratory research design, collecting primary data from firms participating in the securities market and 238 respondents who actively participated in the Kenyan securities market. Data was analyzed using SPSS AMOS, employing principal component analysis and confirmatory factor analysis to evaluate the associations between latent variables. Structural equation modelling was undertaken to evaluate any inherent relationship between the study variables. The findings revealed a significant positive influence between FIPR and several key indicators. An increase in FIPRs incentivized foreign investors to purchase more listed securities. As a result, foreign investors are shifting towards online trading due to reforms, which reduce the need for physical travel. The inherent taxation rate adjustment within the reforms has successfully drawn in more foreign investors into the local market. Generally, the results reveal a significant relationship between foreign investor participation reforms and securities market performance in Kenya, demonstrating the influence of these reforms in shaping domestic securities market outcomes. Given that investors constitute sixty-five percent of trading at the Nairobi Securities Exchange, attempts to further increase market activity must consider a reform agenda aimed at attracting foreign investors into the market

Real Estate Investments and Firm Value of Investment Companies Listed at the Nairobi Securities Exchange

Joan Wangechi Kamuru — 2025-05-23

Investment companies are a critical drive for wealth generation, however, in Kenya, these companies have been experiencing a decline in their firm value. For instance, as of May 2023, Centum Investment Co. Ltd’s market capitalization was at KES 5.34 billion, whereas in 2020 market capitalization was at KES 15.006 billion. Based on the declining market capitalization rate and limited research, this study sought to investigate how real estate investments affect firm value of investment firms listed at the Nairobi Securities Exchange. The modern portfolio and resource-based view provided anchorage for this study. A longitudinal study technique and a quantitative research design were adopted targeting five listed investment firms at the Nairobi Securities Exchange. A panel regression model was used. Firm value was significantly impacted by real estate investments, suggesting that a unit rise in the value of real estate assets resulted in a unit increase in company value. Therefore, investment companies in Kenya can maximize their firms’ value through successful real estate investments. It was recommended that investment companies should adopt investment strategies that are geared towards investment in real estate assets. Future research should focus on capturing data from all investment firms in Kenya, to enhance the generalizability of data

Capital Structure and Financial Performance of Manufacturing Companies Listed at the Nairobi Securities Exchange in Kenya

Neema Ndung'u — 2025-05-26

The mix of debt and equity that a business uses to finance its operations is referred to as its capital structure. Thus, it is the configuration of an organization's primary financial sources. Funding for this study came from equity, loan financing, and lease financing. One of the key choices that managers of a company must make in order to accomplish the company's objectives is capital structure. Finding out how capital structure impacted the financial performance of manufacturing companies listed on the Nairobi Securities and Exchange was the main goal of the study. The study's specific goals were to ascertain how the financial performance of manufacturing companies was impacted by loan finance, which was the primary source of outside funding, equity finance, which included the amount of retained profits reinvested in the company, and lease finance, which is defined as the agreement made between a specific asset owner (lessor) and the lessee. Four theories—trade-off theory, pecking order theory, information signalling theory, and agency theory—formed the basis of the study's theoretical model. In order to finish the study, a descriptive research design was used in conjunction with a quantitative research approach. Nine manufacturing firms that are openly traded on the NSE were surveyed. The NSE and the financial statements made public by Kenyan manufacturing companies listed on the NSE provided secondary data for the study. Secondary data was collected annually between 2013 and 2022. The study's instrument for gathering data was a data collection sheet, and a panel regression model was used. Descriptive and inferential analysis were also used to draw conclusions from the information gathered. An indirect association was discovered when the impact of loan financing was investigated. While the relationship between equity finance and return on equity revealed a clear association, a lower level of loan finance was linked to an increase in the return on equity of the enterprises under consideration. Additionally, the statistical study showed that the dependent variable, return on equity, and the chosen capital structure factors had a strong association. According to this study, the model has a strong explanatory power, accounting for almost 93% of the variance in return on equity.

Impact of Taxation on Investment for Mobile Network Operators in Zimbabwe

Gift Kallisto Machengete, PhD — 2025-05-26

Using panel data of Mobile Network Operators in Zimbabwe, this paper investigates the impact of taxation on investment in the telecommunications industry in Zimbabwe. Using Dynamic Panel Data Models to address the heterogeneity of the individual telecommunication operators and by the use of lagged variables as instruments to deal with endogeneity, we find statistically strong evidence of a negative impact of taxation on investment by Mobile Network Operators. An increase in excise duty by 1 percent reduces investment by Mobile Network Operators by 0.13 percent. Relatedly, an increase in Value Added Tax by 1 percent reduces investment by 1.6 percent. Furthermore, based on a model with endogenous independent variables with six lags of the investment variable, an increase in Mobile Network Operators’ revenue by 1 percent increases investment by 2.2 percent. From a policy perspective, the results give a further and deeper understanding of the complex and dynamic relationship between tax regulations and strategic decision-making in the telecommunications industry and inform evidence-based policymaking. The impact of taxation in the telecommunications sector is a multi-pronged issue that needs to be structured around not only the benefits it generates to the government but also the costs it causes to users, licensed operators and the economy in general. The findings help to illuminate the importance of adopting context-specific approaches to tax policy design, administration and reform. By combining empirical evidence and practical implications, this research contributes to a deeper understanding of the dynamics shaping tax systems in the telecommunications sector. Scope still exists for further interrogation by extending the analysis to Internet Access and Service Providers.

The Introduction of a BRICS Currency and Its Impact on the International Financial Architecture

Enrico Moch, PhD — 2025-05-27

The idea of a joint BRICS currency emerges from a growing tension within the global financial order. The dominance of the US dollar is no longer perceived as neutral but as an instrument of structural power. Within this environment, BRICS member states seek to expand their autonomy. Their monetary initiative is not limited to questions of transaction cost or technical efficiency. It reflects a broader dissatisfaction with existing financial hierarchies and signals a desire to reshape the terms of international exchange. The proposal carries symbolic weight. It challenges existing narratives and introduces an alternative vocabulary of economic sovereignty. This study analyses the structural and political conditions under which such a currency might develop. Methodologically, it is based on a qualitative document analysis of publicly accessible policy papers, declarations, and expert publications. The underlying question is not whether a currency will be implemented, but how its possibility alters the imagination of monetary order. This study analyses the structural and political conditions under which such a currency might develop. It explores institutional asymmetries, conflicting policy priorities, and limitations in trust and governance. Rather than assuming linear progression, the analysis considers friction, inconsistency, and competing expectations among BRICS members. Pilot projects and institutional frameworks are examined, not as functional endpoints, but as provisional experiments. The underlying question is not whether a currency will be implemented, but how its possibility alters the imagination of monetary order. Findings suggest that the initiative, even in its early form, already alters expectations within the international system. Its operational viability remains uncertain. Yet its political resonance extends beyond technical feasibility. What is at stake is not only who controls money, but who defines its meaning and function within a contested multipolar world.

Moderating Effect of Debt Literacy on the Link between Debt Management Behaviour and SME Growth Sustainability

Apollo Okello — 2025-06-04

Small and Medium-sized Enterprises (SMEs) play a crucial role in the economic development of emerging economies; however, their growth is frequently obstructed by financial mismanagement and insufficient debt literacy. This research examines how debt literacy influences the relationship between debt management practices and the sustainability of growth in SMEs located in Lira City, Uganda. This study assesses the interaction between behavioural traits—such as lifestyle patterns, religiosity, and financial self-efficacy—and dimensions of debt literacy (debt knowledge and debt skills) in relation to firm growth. A cross-sectional quantitative design was utilized, and data were gathered from 311 SMEs through a structured questionnaire. Structural Equation Modelling (SEM) utilizing a bootstrap approach was applied to examine direct and moderating effects. The findings indicate that lifestyle patterns substantially impede the growth of SMEs, whereas financial self-efficacy and religiosity do not exert direct effects. Both traits positively influenced debt literacy, which was identified as a significant mediating factor. Debt literacy served as a partial mediator in the relationship between behavioural traits and firm growth, underscoring its significance in converting behavioural dispositions into sustainable financial results. The results substantiate the relevance of the Theory of Planned Behaviour, Sustainable Growth Theory, and Financial Capability Theory in elucidating SME performance. This study enhances theoretical understanding and informs policy development by illustrating the importance of debt literacy for effective financial behaviour. The integration of debt literacy into national SME support frameworks and financial training initiatives, customized to the behavioural profiles of entrepreneurs in developing economies, is recommended

The Effect of Entrepreneurial Culture on Financial Performance. Evidence from Manufacturing SMEs in Mutare Nyakamete

Caleb Magoba — 2025-06-23

The research aimed at investigating the influence of entrepreneurial culture on the financial performance of SMEs as measured by return on investment (ROI). The objectives of the research were to identify elements of entrepreneurial culture, and factors promoting institutionalising entrepreneurial culture, establish reasons inhibiting institutionalising entrepreneurial culture in manufacturing SMEs and examine the association between entrepreneurial culture and financial performance in manufacturing SMEs. A mixed method research strategy which blends quantitative and qualitative research design was used. Data was collected from a sample of 61 participants using questionnaires and interviews as data collection instruments. Descriptive statistics and inferential statistics analysis tools were employed. Data analysis and presentation employed the convenience of MS Excel packages. The research investigation found that the level of education of most manufacturing SMEs in the Mutare Nyakamete industrial zone is commensurate with the minimum requirements necessary for the adoption of an entrepreneurial culture, manufacturing SMEs in Mutare are aware of the critical constituent entrepreneurial culture elements to be embedded in their organisational culture, appreciate and understand the factors which promote institutionalisation of entrepreneurial culture. Further, manufacturing SMEs in Mutare admit that they have no strategy for incorporating entrepreneurial culture in their organisations, face many limitations which need to be addressed if they decide to institutionalise entrepreneurial culture in their organisations and lastly deliberate incorporation of entrepreneurship culture in manufacturing SMEs in Mutare will improve profitability of these firms and value for money for all its stakeholders. The study recommended training organisational members in strategy formulation and organisational behaviour, setting the right tone at the top management level of SMEs, rewarding workers for innovations, setting up research and development policies and considering introducing share ownership schemes for employees so that they develop a sense of ownership for their employer organisations. It also recommended that the government should create conducive entrepreneurial culture environment by incentivising innovations using fiscal policy statements and statutory instruments.

Revisiting the Multiplier–Crowding-Out Trade-off: Empirical Evidence from Kenya

Jackson Barngetuny, PhD — 2025-07-11

This study investigates the complex interplay between government fiscal policy and economic growth in Kenya, focusing particularly on the balance between fiscal multipliers and the crowding-out of private investment. Using a quantitative approach, the research applies Local Projection Methods (LPM) to estimate the size and timing of fiscal multipliers and employs Vector Autoregressive (VAR) models to assess the extent to which public borrowing influences private sector investment. The analysis utilises time-series data spanning from 2000 to 2023, sourced from authoritative institutions such as the Kenya National Bureau of Statistics, the Central Bank of Kenya, the World Bank, and the International Monetary Fund. The results reveal that fiscal multipliers in Kenya are moderate in magnitude, with government spending raising GDP by approximately 0.25% in the short run, increasing to nearly 0.60% over a longer horizon. Notably, capital investments—especially in infrastructure and education—demonstrate significantly stronger multiplier effects compared to recurrent expenditure, which shows only limited influence on growth. The study also uncovers a pronounced crowding-out effect whereby heightened public borrowing leads to increased interest rates, thereby constraining private investment, particularly when public debt levels are high. Furthermore, the effectiveness of fiscal interventions is found to vary according to macroeconomic conditions, emphasising the importance of maintaining fiscal prudence. These findings highlight the critical need for strategic fiscal management, prioritising productive public investments alongside sustainable debt practices, to enhance economic growth and foster inclusive development in Kenya

The Paradox of Taxation and Development in Ivory Coast: An Empirical Inquiry into High Tax Burdens amidst Low Development Outcomes

Kagarura Willy Rwamparagi — 2025-07-16

Influence of Microfinance Factors on Poverty Reduction among Youths in Tanzania: A Case Study of Kyerwa District

Kim Abel Kayunze, PhD — 2025-07-20

This paper examines the influence of microfinance factors on poverty reduction among youth in Kyerwa District, Tanzania. The specific objectives were to assess the services youth receive from microfinance institutions (MFIs), analyse changes in income and monetary values of asset ownership before and after accessing the services, and determine the influence of microfinance factors on the changes. A sample of 150 youth was selected using purposive and stratified sampling, and primary data were collected through a structured questionnaire and analysed using the IBM SPSS Statistics software for descriptive and inferential statistics. For the latter, multiple linear regression was run. It was found that 92.6% of the respondents had accessed financial and non-financial microfinance services; 86.0% of them had received savings services, and 92.8% of them had received business development, training and capacity building services. The mean increases in incomes and monetary value of assets owned were TZS 3,290,787.00 and TZS 3,515,367.00, respectively. Based on multiple linear regression results, the amount of loan received had a positive influence on changes in both income (β = 1,280,334.689; p = 0.594) and monetary values of assets (β = 2,386,638.904; p = 0.001). Moreover, having business development services also had a positive influence on changes in both income (β = 3,630,612.87; p = 0.393) and monetary values of assets (β = 1,888,063.687; p = 0.154). Moreover, the study employed two Key Informant Interviews (KIIs) and three Focus Group Discussions (FGDs). The KIIs were conducted with microfinance officers, while the FGDs involved 24 youth participants (8 in each group) from different wards. The KIIs used semi-structured guides to capture expert perspectives on microfinance service delivery and youth challenges. The FGDs explored lived experiences, challenges before and after microfinance access, and perceptions on service effectiveness. Thematic analysis of the qualitative data revealed enhanced self-employment, improved decision-making, and empowerment through training, as well as obstacles like high interest rates, limited mentorship, and short loan repayment periods. These findings suggest that, while loans are effective for poverty reduction, business development services to loan recipients are also important. Microfinance institutions issuing loans to youth should also offer them non-financial services, particularly business development, training, and market linkages, if the youth are to reduce poverty effectively. Youth organisations and community groups should actively engage with MFIs to identify youth-specific needs and promote service awareness, fostering greater participation.