Journal Articles

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The causal relationship between inflation, interest rate and stock market volatility in Kenya
(European Journal of Business, Economics and Accountancy, 2016) Amata, Evans Ombima ; Muturi, Willy; Mbewa, Martin
This study examined the relationship between interest rate, inflation and stock market volatility in Kenya using both primary and secondary data. A monthly time series data for a period of 14 years from January 2001 to December 2014 was used to study the relationship. Additionally, 385 Questionnaires were distributed to individual investors to understand investor’s perceptions on the relationship. The vector error correction model was used to analyse time series data for the long run causal relationship between inflation, interest rate and stock market volatility, while the granger causality test was used to analyse the short run relationship. Findings revealed that there was a positive and significant long run relationship between inflation rate and stock market volatility (t-statistic= 5.96). Findings also show a positive and significant short run relationship between inflation and stock market volatility (chi-square value of 13.39 and a p-value of 0.0039). The relationship between interest rate and stock market volatility was found to be negative and weakly significant both in the short run (p-value of 0.0683) and long run (t-statistic of -1.90). Results from investor’s perception revealed that 69% of the respondents agreed that a change in inflation rate causes fluctuation in share prices. Additionally, primary data results show that 75% of the respondents agreed that sudden changes in the interest rate have always caused variations in the stock market returns
Determinants of the uptake of NHIF medical cover by informal sector workers: A case of UNAITAS SACCO members in Muranga County
(American Journal of Economics, 2016) Kituku, Anastasia M.; Amata, Evans Ombima ; Wachira, David Muturi
The purpose of this study was to establish the major determinants of uptake of medical cover at Kenya’s National Health Insurance Fund by informal sector workers among UNAITAS SACCO members in Murang’a County. Methodology: The target population comprised of all members of UNAITAS SACCO in Murang’a County. The population was 68,000 members who were in existence as at December 2014 (SASRA, 2014). Stratified random sampling technique was used to select 150 members in the informal sector participating in the study. A likert scale questionnaires was used to collect quantitative data. Statistical package for social science (SPSS) was used to draw inferences from the coded data. This included descriptive and inferential statistics. Results: Results showed that the major determinants of level of uptake of medical cover at Kenya’s National Health Insurance Fund by informal sector workers among UNAITAS SACCO members in Murang’a County were namely income level, awareness of NHIF benefits, access to NHIF outlet and the amount of premiums payable. The results also revealed that there were other determinants of uptake of NHIF medical scheme. These included gender of the head of the household, the level of education, presence of children, age and marital status. Unique contribution to theory, practice and policy: The study recommended that the government should educate the people operating within the informal sector on better ways of accessing finance so as to increase their capital and as result increase their levels of income. This would result to increased uptake of the NHIF medical scheme
Effect of Macroeconomic Variables on Stock Market Volatility in Kenya
(Jomo Kenyatta University of Agriculture and Technolog, 2017) Amata, Evans Ombima
Stock market volatility is widely regarded as one of the factors that erode investor confidence in African markets. This happens when a sharp fluctuation in share prices is not explained by changes in fundamental economic factors. Theories in finance have for long viewed macroeconomic variables as predictors of stock market volatility, while studies in behavioral finance have associated stock market volatility with investor behavior, particularly the herding behavior. This study sought to examine the relationship between macro-economic variables and stock market volatility in Kenya. Specifically, the study examined the direct relationship between each of the four selected macro-economic variables namely; interest rates, inflation rate, foreign exchange rate, gross domestic product, and stock market volatility. The study further explored the moderating effect of investor herding behaviour on the direct relationship between selected macroeconomic variables and stock market volatility. The study adopted a descriptive research design and targeted all companies listed on the Nairobi Securities Exchange from January 2001 to December 2014. The study used secondary data on interest rate, exchange rate, inflation rate and GDP, covering a period of 14 years. The data was obtained from the Kenya National Bureau of Statistics and the Central Bank of Kenya. Data on share prices and market indices was acquired from the Nairobi Securities Exchange. Stock market volatility was measured by computing the standard deviation of the Nairobi Securities Exchange daily and monthly returns over the 14 year study period. The study used a market-wide herd index which was calculated using the Cross Sectional Standard Deviation (CSSD) method. Data was analyzed using E-views version 8. The study employed both correlation and regression analysis. Results from correlation analysis found that there was a significant relationship between all selected macro-economic variables and stock market volatility. However, when the long run and short run causal relationship was tested using vector error correction model (VECM) and xvii granger causality test, the study found that interest rate and inflation granger cause stock market volatility both in the short run and long run in Kenya, while GDP and exchange rate did not have a direct causal relationship with stock market volatility. The study also established that investor herding behaviour had no direct causal relationship with stock market volatility, however, investor herding behaviour was found to significantly moderate the relationship between exchange rate and stock market volatility on the Nairobi Securities Exchange. The study findings were limited to selected macro-economic variables and methods used in measuring and analysing the relationship. Further studies are recommended to investigate other macro-economic variables in order to understand their effect on stock market volatility in Kenya. The study recommends a strict monetary policy and control of factors contributing to change in inflation and interest rates which the study finds to be the key variables contributing to stock market volatility.
Effects of Credit Card Incentives on Consumer Borrowing In Kenya: A Case of Commercial Banks in Kenya
(International Journal of Academic Research in Economics and Management Sciences, 2017) Amata, Evans Ombima; Mwende, Joyce; Wachira, David Muturi
Financial institutions have mainly relied on incentive programs as their main strategic driver to increase electronic payments, such as through use of credit cards. Credit cards have been globally acclaimed for their benefits that range from their ability to ensure tax-compliance, security, instant cash and their ability to facilitate settlement of cross-border transactions. However, there exists a great challenge of credit card usage, such as ease of accumulation of debts and high interest charges. The purpose of this study was to determine the effect of credit card incentives on consumer borrowing in Kenya. The study employed a descriptive study approach using a sample size of 18 commercial banks offering credit card services. Selfadministered questionnaires were used to collect information. Credit card incentives were found to be a major contributor to credit card uptake. The study also found that most banks used incentives such as rewards for repeated use, low interest rates, traveling awards and benefits to influence the spending behavior of their clients. The study found credit card also affected spending behavior. It is concluded that credit card incentives can be effectively used by banks to increase use of credit cards. It is recommended that financial institutions should educated their customers on how to use their credit cards so that they do not fall into a debt trap.
Effects of Electronic Human Resource Management Practices on Organizational Performance: A Case of University of Maryland Programs, Nairobi Kenya
(Journal of Human Resource and Leadership, 2020) Obama, Moureen Atieno; Keino, Dinah Chebet; Kyongo, Joanes Kaleli; Muriithi, Samuel Muiruri; Amata, Evans Ombima
The purpose study was to determine the effect of Electronic Human Resource Management (EHRM) practices on organizational performance at University of Maryland Programs (UMB), Kenya. The objectives of the study were to identify the existing Electronic Human Resource Management practices in University of Maryland Programs; to examine the level of performance in UMB; to establish how EHRM practices contribute to organizational performance in UMB. This study adopted a descriptive research design. The researcher used a stratified sampling technique. The sample size of the study was 107. Primary data was collected by use of questionnaires. The validity and reliability of the instrument were measured by the Cronbach Alpha test. The collected data was analyzed using the Statistical Package for the Social Sciences (SPPS) twenty third edition. The study found that 88.7%, of the respondents were aware that e-recruitment was used at UMB to a large extent as indicated while 83.5%, of the respondents were aware that e- e-compensation was utilized at UMB to a large extent and finally 84.1% of the respondents were aware that e-recruitment was used at UMB to a large extent Secondly, the indicators of organizational performance at UMB were found by the study to include workforce’ agility, organizations productivity, organizational effectiveness and organizational flexibility as agreed by 75.3%, 61.9%, 69.0% and 67.0% of the respondents. Finally, 76.8%, 76.05%, 76.3% and 74.6% of respondents agreed that e-recruitment, e-training, e-compensation and e-performance wereimplemented had effect on organizational flexibility, organizational effectiveness, workforce agility and organizational productivity at UMB. The study recommended that UMB to focus on E-performance management since it has a significant relationship with organizational effectiveness.
The impact of corporate diversification on firm value in Kenya
(African Journal of Business Mangement, 2017) Manyuru, Anthony; Wachira, David Muturi; Amata, Evans Ombima
This study investigates the impact of corporate diversification on the value of firms listed at the Nairobi Securities Exchange (NSE). Panel regression techniques were used as the estimation methods. The overall findings of the study where somewhat mixed. The study finds that industrial diversification reduces firm value, but geographical diversification does not have a significant impact on firm value. When examining each industry individually, the study established that industrial diversification enhanced firm value in the agricultural industry but did not significantly influence firm value in the other industries.
Relationship Between Macro-economic Variable, Investor Herding Behavior and Stock Market Volatility in Kenya
(International Journal of Economics, Commerce and Management,, 2016-08-08) Amata, Evans Ombima; Muturi, Willy; Mbewa, Martin
This study sought to examine the relationship between interest rate, inflation, gross domestic product (GDP), foreign exchange, investor herding behaviour and stock market volatility. Published time series data from January 2001 to December 2014 was obtained from the Central Bank of Kenya, Kenya National Bureau of Statistics, Capital Market Authority and the Nairobi Securities Exchange. Granger causality test was used to determine the short run causality while the Vector Error Correction Model (VECM) was used to test the long run causality between predictor variables and stock market volatility. Result from the regression model show a positive and significant relationship between inflation and stock market volatility both in the short run and long run. The study finds that an increase in inflation by 1% leads to an increase in stock market volatility by approximately 24%. Results also revealed that there is a negative and significant relationship between interest rate and stock market volatility both in the short run and long run. GDP, Foreign exchange and herding behaviour had no significant relationship with stock market volatility in Kenya.
The Role of Agency Banking In Improving Financial Access in Kenya: Case Study of Langata Constituency
(Journal of Developing Country Studies, 2016) Kitilit, Juddie Cheyech; Bowen, Michael; Amata, Evans Ombima
Purpose:The purpose of this study was to establish the effect of agency banking model on financial access in Kenya, especially for the lower income spectrum of the society. Methodology:A mixed method descriptive research design was used, which involved the use of both qualitative and quantitative research methods. The study used purposive and stratified random sampling method. Statistical package for social science programmewas also used to analyze the data. The researcher used frequency distribution, histograms and percentage to present the data. Results:Study findings revealed that agency banking plays a major role in the convergence of various banking and non-banking players to provide financial services to all end consumers of financial services. In addition, it increases the number of access points that provide financial services. Further the study indicates that the level of utilization of agency banking was high. Unique contribution to theory, practice and policy: It is highly recommended that the regulator of banks to encourage more banks to come up with agency banking as this would increase financial access. The banks also need to be more supportive to agency units through minimizing system down times as this would increase the utilization of agency banking services

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