Managing market risk for financial performance: experience from micro finance institution in Kenya

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dc.contributor.authorKahihu, Peter Karugu
dc.contributor.authorWachira, David Muturi
dc.contributor.authorMuathe, Stephen M. A.
dc.date.accessioned2024-07-29T09:48:11Z
dc.date.available2024-07-29T09:48:11Z
dc.date.issued2021-05
dc.descriptionJournal Article
dc.description.abstractAbstract Purpose – The purpose of this study was to investigate on managing market risk and financial performance, experience frommicrofinance institutions (MFIs) in Kenya. Design/methodology/approach – This study used positivism philosophy and used explanatory nonexperimental research designs. The targeted population was all the 13 registered deposit-taking MFIs in Kenya and a census approach was used. The study used secondary data which was collected and analyzed from microfinance Institutions annual audited financial reports for the period between 2014 to 2018. This study was anchored on two theories, namely, resource-based value theory and extreme value theory. Findings – The results indicated that interest rate and financial leverage risk had a positive significant effect on the financial performance of MFIs in Kenya. Foreign exchange risk was found to have a negative significant effect on the financial performance of MFIs. However, inflation rate risk was found to have no significant effect on the financial performance ofMFIs. Research limitations/implications – This study recommended that the chief executive officers of MFIs should use the mechanism of identifying market risk variables, especially Interest rate, financial leverage and foreign exchange risks to enable them to put the necessary measures to mitigate those risks and enhance the financial performance ofMFIs in Kenya. Originality/value – This study is unique as it touches the microfinance industry which has a steady fast growth in assisting accessibility of financial services to small and medium enterprises. Most of the previous study concentrated on other industry in the financial sector.
dc.description.sponsorshipDaystar University
dc.identifier.citationKahihu, Peter Karugu., Wachira, David Muturi., Muathe, Stephen Makau. (2012)., Managing market risk for financial performance: experience from micro finance institution in Kenya., Journal of Financial Regulation and Compliance., Vol. 29 No. 5, 2021.
dc.identifier.issn1358-1988
dc.identifier.urihttps://repository.daystar.ac.ke/handle/123456789/4853
dc.language.isoen
dc.publisherJournal of Financial Regulation and Compliance
dc.subjectKenya
dc.subjectForeign exchange risk
dc.subjectFinancial performance
dc.subjectInterest rate
dc.subjectInflation rate
dc.subjectMarket risk
dc.subjectFinancial leverage risk
dc.subjectMicrofinance institutions
dc.subjectInterest rate risk
dc.subjectInflation risk
dc.titleManaging market risk for financial performance: experience from micro finance institution in Kenya
dc.typeArticle

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