Green Financing, Corporate governance and Financial Performance of Commercial Banks in Kenya: A Review of Literature (Published)
This research examines the interplay between green financing and the financial performance of commercial banks in Kenya, with a particular focus on the role of corporate governance as a moderating variable. Green financing refers to the investment of financial resources in projects that foster environmental sustainability. As concerns regarding environmental issues grow globally, financial institutions are progressively incorporating green financing into their operational frameworks. This study aims to assess the implications of such practices on the financial stability and competitive positioning of banks within the Kenyan market. Through a comprehensive review of scholarly articles, reports from the Kenya Bankers Association, and various working papers accessed via Google Scholar, the findings indicate a favorable relationship between green financing initiatives and enhanced financial performance. Furthermore, the analysis highlights a general agreement among numerous studies that corporate governance plays a mediating role in the relationship between green financing and the financial outcomes of commercial banks. These findings emphasize the critical significance of adopting sustainable banking practices to bolster profitability while simultaneously advancing environmental sustainability.
Keywords: Financial Performance, green financing, lending in commercial banks., sustainability financing
Moderating Role of Firm Size on Carbon Accounting and Financial Performance of Listed Firms in Nigeria (Published)
This study investigates corporate carbon accounting and financial performance of listed manufacturing firms in Nigeria. The study used quantitative research design and data were collected from primary and secondary sources. The primary data comprised of structured questionnaire from a sample of 312 accountants in listed manufacturing firms in Nigeria. Data collected from the respective respondents were analysed by applying structural equation modelling through the employment of SmartPLS version 4. The findings from the data analysis suggested a positive and insignificant relationship between scope of carbon emissions, emission sources, emission categories and emission factors positively and insignificantly impact on return on assets of listed manufacturing firms in Nigeria. Also reporting boundaries and firm size negatively and insignificantly influence return on assets. On the basis of the findings, the study concluded that carbon emission accounting influences the financial performance of listed manufacturing firms in Nigeria. Hence, the study recommended amongst others that managers of listed manufacturing firms should consider carbon mitigation strategies seriously since carbon emissions negatively influence shareholder value. This means that managers can enhance shareholders’ value by undertaking emission abatement policies to boost their financial and market performance.
Keywords: Carbon Accounting, Emission Sources and Factors, Financial Performance
Influence of Non-Performing Loans, Lending rate and Financial Performance of Commercial Banks in Kenya. A Review of the Literature (Published)
This study examined the impact of non-performing loans on the financial performance of publicly listed commercial banks in Kenya, focusing on the bank lending rate as a mediating variable. It analyzed the relationship between non-performing loans and banks’ return on assets (ROA) and return on equity (ROE) through a review of empirical literature from Google Scholar and the Central Bank of Kenya reports. Studies show mixed results on the relationship between non-performing loans (NPLs) and bank performance. Previous studies have highlighted an inverse relationship between non-performing loans and return on assets (ROA), as noted by Siddique et al. (2022) and others. On the other hand, Mrindoko et al. (2020) discovered a negligible negative correlation with return on assets. Generally, the literature suggests an inverse relationship between NPLs and bank performance, emphasizing a diversified loan portfolio for improved profitability. Researchers have noted connections between NPLs and lending rates (Case et al., 2023; Rahmananingtyas, 2022; Koskei & Samoei, 2024), as well as between lending rates and bank performance (Hania & Himel, 2023; Dondi & Mule, 2023). This hypothesis suggests that lending rates play a mediating role in the relationship between non-performing loans (NPLs) and the financial performance of commercial banks in Kenya, highlighting the need for additional empirical research in this area.
Keywords: Financial Performance, Lending Rate, Non-Performing Loans, Return on Assets, Return on Equity
Current Liabilities and Financial Performance of Healthcare Firms in Nigeria (Published)
The study evaluated the relationship between current liabilities and financial performance of healthcare firms in Nigeria. The specific objectives of the study are to assess the effect of Trade Payables, Current Tax Liabilities and Short-Term Borrowings on Return on Assets of Healthcare firms in Nigeria. Ex post facto research design was adopted. Data were collected from annual reports and accounts of sampled firms within the industry to test the null hypotheses that selected current liabilities do not affect return on assets significantly. Correlational analysis was the tool of analysis using panel data set covering Fifty (50) observations from Five (5) firms in the Healthcare sector. The findings revealed that Trade Payables (TP) have weak but significant positive relationship with Return on Assets of Healthcare firms in Nigeria with a correlation coefficient of 0.524514 and a p-value of 0.0001. Current Tax Liabilities have weak but significant positive relationship with Return on Assets of Healthcare firms in Nigeria with a correlation coefficient of 0.539686 and a p-value of 0.0001. Short-Term Borrowings have weak but significant positive association with Return on Assets of Healthcare firms in Nigeria with a correlation coefficient of 0.538232 and a p-value of 0.0001. The implication of the findings is that current liabilities such as trade payables, current tax liabilities and short-term borrowings are significant positive determinants of financial performance of healthcare firms in Nigeria. The study therefore concluded that while the observed relationships were statistically significant, the weak correlations suggest that other factors not examined in this study may have stronger association with return on assets of healthcare firms. The study recommends that effective management of trade payables and current tax liabilities is essential for healthcare firms to successfully navigate the tedious regulatory requirements and enhance financial performance. Furthermore, strategic utilization of short-term borrowings would provide healthcare firms with the necessary financial flexibility to support growth initiatives and address short-term funding needs.
Keywords: Current liabilities, Financial Performance, Nigeria, current tax liabilities, healthcare firms, return on assets (ROA), short-term borrowings, trade payables
Environmental Accounting and Financial Performance of Conoil Plc in Nigeria (Published)
This study investigated the relationship between environmental accounting and financial performance of Conoil. The ex-post facto research design was employed in this case study of the sampled oil gas giant in Nigeria due to its comprehensive disclosure of environmental expenditures in its annual reports. The study utilized secondary data obtained from annual reports and accounts, downloads from Nigerian Exchange Group (NXG), and the company websites covering the period 2008 to 2022. The study employed descriptive statistics, correlation analysis, and Ordinary Least Squares (OLS) regression using Eview9 econometric software for data analysis. The correlation analysis result indicates that environmental restoration costs (ERC) are negatively correlated with profit after tax (PAT) and return on assets (ROA), while a positive correlation exists between PAT and ROA, providing insights into Conoil Plc’s financial and environmental performance dynamics. The regression analyses reveal that while environmental restoration costs have a significant negative impact on return on assets (ROA), neither ERC nor health, safety, and environmental expenses (HSE) significantly influence profit after tax (PAT), indicating the nuanced relationship between environmental accounting metrics and financial performance in Conoil Plc’s operations. The research additionally recommended that the corporation should regularly carry out environmental audits to evaluate adherence to environmental rules and pinpoint opportunities for enhancing environmental performance. The company should allocate resources towards renewable energy projects to reduce reliance on fossil fuels, mitigate environmental impact, and enhance long-term financial sustainability.
Keywords: Financial Performance, Health, environmental restoration costs, safety and environmental expenses
Impact of Internal Control Challenges on Financial Performance of Local Government Councils of Nasarawa State (Published)
This research work examined the impact of internal control challenges on the financial performance of local government councils in Nasarawa State, Nigeria. The study employed a mixed-methods approach, combining qualitative and quantitative research methods. Qualitative data are gathered through interviews and focus group discussions with relevant stakeholders, including council officials, financial managers, auditors, and community representatives. Quantitative data are collected through surveys and analysis of financial reports and performance indicators. A structured close ended questionnaire was administered to 211 staff that forms the sample size. The study used the correlation coefficient to establish the relationship between internal control challenges and financial performance, while the multiple regression analysis was used to test all the hypotheses of the study at 0.05 level of significance. Result of the correlation indicates significant relation between internal Control and financial performance whereas the regression analysis found that internal control challenges have significant positive impact on financial performance of Local Government Councils in Nasarawa State. It concluded therefore that effective accountability and stable financial practices in Local Government Councils can only be achieved through a properly instituted internal control system with free or minimal challenges. It recommended that: functions and responsibilities within the local government councils are clearly defined and separated.
Keywords: Financial Performance, Internal control, Local Government, councils
Corporate Governance Practices and Performance of Deposit Money Banks in Nigeria (Published)
Performance of deposit money banks in Nigeria. The specific objective of the study was to critically appraise the relationship between size of board of directors, composition of board members, frequency of board meetings and return on assets of deposit money banks in Nigeria. The data were sourced through secondary sources from annual reports and accounts of sampled deposit money banks in Nigeria. The stated Null Hypotheses were tested through data analysis by using the correlation analysis as analytical tool. The research findings reveal that board size has a positive and strong relationship with return on assets while board composition has a positive but moderately strong association with return on assets. Furthermore, frequency of board meetings has a negative and very weak relationship with return on assets of deposit money banks in Nigeria. The implication of the findings is that increased board size could result in the improvement of financial performance of deposit money banks. The research found that such increase in number of members of the board will generate the desired outcome if it centers on independent nonexecutive directors with wealth of corporate governance experience, sound and profitable contacts, good and relevant education. The negative relationship with frequency of board meetings implies that banks should begin to trim down on number of board meetings as research has found that frequent meetings signal a crisis or distress situation with perceptions of going concern issues and bank failure. The study recommends that new independent non-executive professionals with critical governance and management attributes could be introduced into the board to improve the quality of decisions, earnings and general performance. Frequency of Board Meetings should be reduced to save cost and time while virtual meetings should be called more often than physical meetings as distance is no longer a barrier.
Keywords: Banks’, Board Composition, Board Meetings, Board size, Financial Performance, Nigeria, Return on Assets
Factors Affect Financial Performance of Savings and Credit Co-Operative Societies During Covid 19 Pandemic in Dodoma Region (Published)
The objective of the study was to assess factors affect the financial performance of the Savings and Credit Cooperative Societies operating in Dodoma Tanzania. The quantitative method was used to analyse data. The descriptive survey was used whereas systematic and purposive sampling techniques were used to secure 63 respondents. Survey, and documentary review were used to collect data meanwhile descriptive and regressions analysis were used in data analysis. There study was guided by Resource Dependence Theory (RDT), and Cash Conversion Cycle Theory. The results revealed that the overall model was statistically significant since (Prob > chi2=0.000). The model’s independent variables explained almost 63.8% of the variation in the return on asset of SACCOS in Dodoma. The following explanatory variables (such like interest rate, loan default and drop out of the members) were statistically significant influencing the return on asset for SACCOS selected from Dodoma Tanzania. Researcher recommended SACCOS should put more emphasis on online supervision and self-regulation in periods of pandemic, and considered it as one of the strategies to help the viability of the sector. Cooperative Audit and Supervision Corporation should opt to use off-site audit under hygienic environment to curb the spread of the virus.
Citation: Juma M.L. and Maseko F.E. (2022) Factors Affect Financial Performance of Savings and Credit Co-Operative Societies During Covid 19 Pandemic in Dodoma Region, European Journal of Accounting, Auditing and Finance Research, Vol.10, No. 11, pp.104-124
Keywords: COVID-19 pandemic, Financial Performance, SACCOS
Internal Audit Practices and Financial Performance of Construction Companies in Nigeria (Published)
This study was carried out with the aim to examine internal audit practices and financial performance of construction companies in Nigeria. In order to actualize the objectives of the study, various literature and theoretical issues was discussed. The instrument used for the purpose of this research was gathered through primary source. The researcher administered a total of two hundred (200) questionnaires to respondents, out of which one hundred and eighty-eight (188) was retrieved and was used for the presentation and analyses. The hypotheses were tested using Ordinary Least Square (OLS) regression technique. The findings from analysis revealed among other things that there is a positive and significant relationship between size of the internal audit, experience of the internal audit, qualification of the internal audit and Financial Performance. The study also revealed that there is a positive and insignificant relationship between independence of internal audit and Financial Performance. In line with the findings, we recommend that the internal auditor should have maximum independence from the industry they work in. The internal audit activities must be positioned in such a way that it may obtain cooperation from industry that is being audited that have free, unrestricted access to all functions, records, property and personnel including those charged with governance.
Citation: Jacob, M.S., Edheku, O.J., and Obembe, O.J. (2022) Internal Audit Practices and Financial Performance of Construction Companies in Nigeria, European Journal of Accounting, Auditing and Finance Research, Vol.10, No. 11, pp.87-103
Keywords: Companies, Construction, Financial Performance, Nigeria, internal audit practices
The Effects of the Budgetary Process on the Financial Performance of Commercial Banks in Tanzania: A Case of CRDB, NMB AND NBC (Published)
The objective of the study was to investigate the effect of budgetary process on the Financial Performance of Commercial Banks which were NBC, NMB and CRDB in Dodoma Tanzania. The mixed method was used as both qualitative and quantitative data were used. The descriptive survey was used whereas randomly sampling was used to secure 95 respondents. Survey, interview and documentary review were used to collect data meanwhile descriptive and multiple regressions were used in data analysis. There was grounded on Resources allocation theory and structure efficiency theory. The results showed that budgetary process had positive and significant effect of Financial Performance of Commercial Banks. This is because R2 = 58.6% while at F (8, 87) = 28.86, p < 0.000 implied that budget process had positive and significant effect on FP of CBs in Dodoma Tanzania. Researcher recommended that budgetary process should be enhanced through an increased participation and enhance on internal controls.
Keywords: Commercial Banks, Financial Performance, budgetary process