Effect of Liquidity Management on Profitability of Commercial Banks in Nigeria

Introduction: Commercial banks in Nigeria are more engrossed with profit maximization and as such they tend to neglect the importance of liquidity management. This eventually leads to financial indebtedness and consequently low patronage and deposit flight. Purpose: This study examined the effect of liquidity management on profitability of commercial banks in Nigeria using data obtained from the financial statements of tier 1 banks over the period 1998 to 2018. Methodology: The study employed the correlational research design and engaged the Johansen test with the vector error correction model to access the long run and short run relationship among the variables. Findings: The results of the Johansen test revealed at most two cointegrating equations among the variables, while result of vector error correction revealed a positive effect of liquidity on return on asset and return on equity but a negative effect on net profit margin. Results revealed a fairly stable trend in the liquidity and profitability indicators from 1998-2018 and concluded that banks controlled enough liquidity to serve their obligations. Unique contribution to theory, practice and policy: The study recommends that the central bank of Nigeria should maintain the regulation over the minimum liquidity of commercial banks as this affects their profitability.

Debt Capacity and Financial Performance of Quoted Firms in Nigeria

Introduction: The field of research treating debt capacity can be comprehended as a unique piece of a lot more extensive capital structure hypothesis. This started with the paper of Modigliani/Miller in 1958. There has been a continuous and serious hypothetical dialog about the ideal capital structure of an organization. One generally new piece of the related discussion is debt capacity and potential connection to the capital structure of an organization. Purpose: The purpose of the study was to examine the effect of debt capacity and financial performance of quoted firms in Nigeria. This study expected that debt capacity can be a way to characterize and deal with the capital structure of an organization. Methodology: The study formulated 3 hypotheses and the least square multiple regression was used for hypothesis testing empirical results based on 2014 to 2018 accounting and marketing data for 20 quoted firms in Nigeria lend some support to the pecking order and static tradeoff theories of optimal capital structure. Data were sourced from the Nigeria Stock Exchange, Security and Exchange Commission, and other relevant data sources. This study investigated, experimentally, if there might be a significant relationship between the debt capacity of organizations and their financial and market performance. Findings: A firm’s debt capacity was found to have a significant impact on the firm’s accounting performance measure. Debt capacity measures have a positive and significant relationship with the market performance measure (Tobin’s Q). A fascinating finding is that all the influence estimates have a positive and exceptionally critical association with the market execution measure (Tobin’s Q), which could somewhat bolster Myers, (1977)’s contention that organizations with high transient obligation to add up to resources have a high development rate and superior. Unique contribution to theory, practice and policy: The consequences of this result further affirm some earlier discoveries by different researchers and prior analysts and the exploration work has had the option to discover answers to the examination addresses prior brought up in the basic part in the accompanying ways. It was therefore recommended that Companies can finance themselves with debt and equity capital. By increasing the amount of debt capital relative to its equity capital, a company can increase its return on equity. Also, in transition, the economic environment is more volatile and riskier than in developed markets. Therefore, a management scheme of capital structure that provides for flexibility in financing is preferable.

Volatility Modelling of Stock Returns in the Petroleum Marketing Sector of the Nigerian Stock Exchange

Introduction: Financial markets play key role in the growth and sustainability of the economy. However, high levels of volatility in the markets may adversely affect the financial system and weaken the economy. Purpose: This paper examined the presence of volatility in the stock returns of the petroleum marketing sector of the Nigerian Stock Exchange using ten petroleum marketing firms quoted on the Nigerian Stock Exchange for a period of twenty-four months that is from January 2017 to December 2018. Methodology: The study adopted empirical research design using time series data where ordinary least squares was employed to run the analysis through the use of ARCH/GARCH models. Findings: Among other results, it was seen that a unit increase in volatility (VLT) will lead to 0.006916 decrease in stock returns (STR). Also, the result of R-squared implies that about eight per cent (8%) of the changes in stock returns (STR) is captured by volatility (VLT) while the remaining ninety-two per cent (92%) of the variation in the model is captured by the error term. The ARCH effect observed is statistically significant. The coefficient of the GARCH effect which is significantly positive at 5% shows that past volatility of stock market return is significant and has effect on current volatility. Unique Contribution to theory, Practice and Policy: The implication of this is that an increase in volatility is linked to a significant increase of returns, which is an expected result and thus conforms to economic theory. The results of static and dynamic forecasting of GARCH volatility showed that the volatility is stable. As a result, investors can hold the stock. Among other things, the author recommends that Government should make sufficient regulatory effort that will improve efficiency of stocks performance and reduce volatility aimed at boosting investors’ confidence in the petroleum marketing sector and since the various ARCH and GARCH models showed volatility movement in stock returns, Nigerian government should look for new ways to diversify the economy from dependence on oil and explore other sectors like manufacturing sector and agricultural sector to reduce volatility in the economy and the overall effect on it.

Effect of Non-Monetary Programs on Financial Performance of Selected Firms in the Service Industry in Kenya.

Introduction: Non-monetary rewards are non-financial measures that a merchant or a seller realigns with customer values to attract and retain more customers. This involves providing value to customers in other ways than discount and dollars rewards. Depending on the customer’s values, and on the industry, customers may find more value in non-monetary or discounted rewards. Purpose: The overall objective of the study was to investigate the effect of non-monetary programs in the financial performance of selected firms in the service industry in Kenya. Methodology: The research design adopted for the study was descriptive research design. The study explored major users of non-monetary programs in Kenya including: the telecommunication firms, supermarkets, 18 five-star hotels in Kenya, Kenya airport authority and fueling station in Kenya. The target population was three (3) telecommunication firms (Safaricom, Airtel and Telkom Kenya), 5 large supermarkets and 18 Five Star hotels in Nairobi. Since the population of telecommunication firm is small the study used the census survey method and thus there was no sampling. The researcher used both descriptive and inferential statistics. Findings: The results show that non-monetary programs have a positive and significant relationship with financial performance. The study concludes that non-monetary programs have a positive and significant effect on financial performance of selected service industries in Kenya. Recommendation: Communication Authority of Kenya, Tourism Authority of Kenya and the ministry of trade should support the development and usage of monetary loyalty programs among service industries firms in Kenya. This can be done in friendly manner such as avoiding overly broad and strong regulation of the loyalty programs. In this regard, the government and the law makers should ensure that they involve a variety of loyalty programs stakeholders in the regulatory process, so that their vision and needs can be fairly balanced with government interests. The government should work closely with loyalty programs businesses, users, miners and advocates when creating and enforcing law.

Influence of Point-Based Program on Financial Performance of Selected Firms in the Service Industry in Kenya.

Introduction: Points based programs are programs offered by service industries to their customers when they make a purchase. In Points based system, frequent customers earn points, which translate into some type of reward: discount, gifts, or special customer treatment, customer purchases toward a certain amount of points to redeem their reward. Purpose: This study sought to establish the influence of point-based program on financial performance of selected firms in the service industry in Kenya. Methodology: The research design adopted descriptive method of the study. The target population was three (3) telecommunication firms (Safaricom, Airtel and Telkom Kenya), 5 supermarkets and 18 Five Star hotels. The study used census survey method for telecommunication firms and all the 18 five-star hotels in Nairobi offering loyalty points and thus there was no sampling. The study used secondary data extracted from financial statements. The researcher used both descriptive and inferential statistics. Descriptive analysis and trend analysis of the dependent and the independent variable were conducted. Findings: The results showed that point-based program has a positive and significant relationship with financial performance of selected supermarkets in Kenya. Recommendations: The study recommended that it’s imperative for the policy makers such as Communication Authority of Kenya, Tourism Authority of Kenya and the ministry of trade to support the development and usage of point based programs among supermarkets firms in Kenya. This can be done in friendly manner such as avoiding overly broad and strong regulation of the point based programs. In this regard, the government and the law makers should ensure that they involve a variety of point based programs stakeholders in the regulatory process, so that their vision and needs can be fairly balanced with government interests.

The contribution of horizontal business combination on financial performance of I&M Bank.

Purpose: This research generally assessed the contributions of horizontal business combination on financial performance of commercial banks and established the relationship between bank business combination bank financial performances. Methodology: The study adopted descriptive design to the population of 150 staffs of I&M bank with 109 sample size through purposive sampling. The study analyzed the information from 90 respondents, and financial statements of the bank for the period of 2011-2018. This research adopted a mix of both qualitative and quantitative approaches, primary data were from respondents using questionnaires and interview while secondary data were from financials statements and reports (2011 -2020). The research used SPSS version 20 to produce descriptive analysis (mean, mode, frequencies and standard deviation) for interpretation. Findings: The researcher performed correlation analysis and multiple regression analysis and found 0.834 correlation coefficient, 0.719. adjusted R squared at 95% confidence interval, holding horizontal combination, vertical combination and Lateral combination to a constant zero, financial performance of I&M bank would be 0.262, a unit increase in holding horizontal would lead to increase in performance of I&M bank by a factor of 0.356, a unit increase in vertical combination would lead to increase in performance of I&M bank by a factor of 0.832, a unit increase in Lateral combination would lead to increase in performance of I&M bank by a factor of 0.359. The study concluded that horizontal combination or lateral combination may include the need to increase their capital adequacy, improve on their new product development and acquiring new market share. Recommendations: The study recommends I& M Bank to take advantage of benefits that accrue from conducting business combinations, especially the potential which offers the increasing financial performance, to analyze carefully the type of business combination and to undertake the horizontal with reference to their particular effect on financial performance indicator parameters such Liquidity, Operating profit, Solvency and Profitability.

Investment Risk Management and Financial Performance of Rwanda Social Security Board(RSSB).

Purpose: This research study generally assessed the relationship between Investment risk management and financial performance of Rwanda Social Security Board. It equally important assessed the effect of risk environment, analyzed the effect of risk control, and assessed the effect of risk monitoring on the financial performance of the Rwanda Social Security Board (RSSB). Materials and Methods: The used research design in this study was descriptive. A sample size of 125 respondents was drawn from 180 employees working in RSSB Headquarters. The study used a purposive sampling technique to select respondents. Information was collected using a structured questionnaire administered to respondents and statistically analysed using means, standard deviation and regression analysis via SPSS version 25.0. Results: Results from the first objective shown by a mean M=5.87 and standard deviation SD=2.77 strongly agreed with the statement that a formal risk management system is in place and overall investment objectives are defined and communicated to staff. The study agreed that RSSB Board of Directors approves all investment policies and ensures management takes necessary action. As shown by the mean M =5.45, S.D=1.96. The study concurred that guidelines governing investments are in place and RSSB stands on it, demonstrated by M= 5.67, S. D=0.499. From the results, the second objective demonstrated that the respondents strongly agreed that RSSB ensures that principles and procedures relating to investment and risk response is followed consistently. By M =5.87, S.D=2.77, duties are separated at different levels of management and the Board strongly agreed by M=5.58, SD=2.037, and testing, auditing, assessments of RSSB investment procedures are performed by independent personnel strongly agreed by M =5.85, S.D =2.07. A proactive way to deal with risk administration includes designating risk spending plans and setting risk resilience. Portfolio managers should practice vigilance inside plainly characterized boundaries as a component of their investment strategy. The result from the third objective revealed that there is a strong monitor of investment threshold and rating of sound investments by M =5.58, S.D =2.77. When the risks have been characterized and controls have been set around these risks, a methodical procedure of ordinary observing and detailing of these risks by a independent group guarantees approval and consistency of the approach. Regression analysis, a unit increment in risk environment may bring to increment in productivity by 2.008. A unit enhancement in risk control might bring an increase in productivity by 0.887. Recommendations: From the research findings presented, the study recommended the need to dissect the risk of administrations and consumptions. There is a requirement for the management to completely comprehend their commitments and take fundamental activities in guaranteeing money back, train workers to change their center convictions and help to guarantee the effective achievement of firm objectives. Management should work to improve cost and expenses risk management, even if the current ratio was better, management will need to significantly reduce expenses.

SOCIAL COMPETENCE AND ACCESS TO FINANCE IN FINANCIAL INSTITUTIONS: AN EMPIRICAL STUDY OF SMALL AND MEDIUM ENTERPRISES IN UGANDA

Purpose: The paper examined the mediating effect of innovation in the relationship between social competence and access to finance by Small and Medium Enterprises (SMEs) in Uganda. The major aim was to establish the role of innovation in the relationship between social competence and access to finance. Methodology: The research took a positivist paradigm and a cross-sectional research design were used to collect data from 307 SMEs in Uganda. Close-ended and self-administered questionnaire with question items anchored on a five-point Likert-type scale was used to collect data from either managers or owner of SMEs. Pearson correlation and Hierarchical regression analyses were employed for data analysis. More so, the study adopted MedGraph program, Sobel tests, Kenny, and Baron Approach to test for mediation effects. Findings: The findings indicated that the true drivers of access to finance by SMEs in Uganda are social competence and innovation. However, innovation exhibits partial form of mediation in the relationship between social competence and access to finance. Unit Contribution to practice and policy: Since innovation was found to be a causal chain in the relation between social competence and access to finance in this study, managers of the SMEs should endeavor to reinforce agents of innovation since commercial institutions trade off higher interest and lower collateral requirements for firms involved in the innovative process. Besides, this study can therefore reinforce the importance to foster academic achievement not only because of academic and learning reasons, but also because of its implications in other important domains (such as social competence) of young generation development along the school years. The government of Uganda can therefore, introduce some subjects in schools and institutions that can promote the development of social competences in the learning group. Study Limitation: First, only a single research methodological approach was employed and future research through interviews could be undertaken to triangulate. More so, future studies could use the same basic hypotheses and regression construction, but implement the study in terms of a longitudinal rather than a cross-sectional design. The longitudinal study would need to correct changes in data relative to time element. Keywords: Social Competence, Innovation, Small and Medium Enterprises (SMEs), Mediating effect, Access to Finance.

CREDIT MANAGEMENT SYSTEMS AND FINANCIAL PERFORMANCE OF SAVINGS AND CREDIT COOPERATIVES (SACCOs) IN MID-WESTERN UGANDA

Purpose: To ascertain the relationship between credit management systems and financial performance of SACCOs in Mid-Western Uganda.Methodology: A cross-sectional research design and positivist paradigm were used to collect data from 93 SACCOs in Mid-Western Uganda using a closed-ended questionnaire. Standard linear regression analysis was carried out.Findings: The study findings reveal a moderate, positive and significant relationship between credit management systems and financial performance of SACCOs in Mid-Western Uganda.Unique contribution to practice and policy: This study suggests to management a need to put into place effective credit management systems if SACCOs are to improve their financial performance by ensuring that favorable terms and conditions, and adequate client appraisal process are in place. In addition, government should support SACCOs by providing staff trainings on credit terms and conditions formulation and improving their competencies in client appraisal

Relationship between Liquidity Management and Growth of MSMEs in Africa: A Case Study of Selected Districts of Uganda

Purpose: The study set out to establish to what extent, if any, a relationship exists between liquidity management and growth of MSMEs in Africa, with Uganda as a case study.Methodology: The study used a combination of cross sectional and descriptive designs in which both qualitative and quantitative approaches were adopted. Questionnaires were administered to respondents who answered both open-ended and close-ended questions. Quantitative data was analysed by means of frequencies, percentages, regression analysis and means correlations to arrive at conclusions. The qualitative aspect of the research was intended to clarify the quantitative findings and data. A sample of 400 respondents was chosen from four districts of Wakiso, Mukono, Kampala and Jinja using random sampling. A sample of 400 was chosen from four districts of Wakiso, Mukono, Kampala and Jinja. Of these 371 responded. This represents a satisfactory response rate of over 92%.Findings: This relationship was confirmed by ANOVA results of a large F- Value (23.215) and small significance level (P or 0.000<0.05). Conclusion from the research is that there is a significant relationship between management of liquidity and growth of MSMEs in UgandaUnique Contribution to Practice and Policy: It is recommended that MSMEs review modes of financing liquidity requirements. It is further recommended that MSMEs should practice effective cash planning and investment of surplus funds in ways and manner that enhance the capital, and consequently, growth of the firms. The results of the study should provide very useful input for policy makers, SME managers and owners while making to enhance growth of MSMEs. It is also useful for researchers and academics