AN INVESTIGATION INTO THE IMPACT OF FUND TRANSFER AGENCIES ON LIQUIDITY OF FIRMS (A CASE OF KENYA POWER & LIGHTNING COMPANY LTD)

Authors

  • Aisha M. Mohamed Kenya Methodist University
  • Dr. C. M. Njoroge Kenya Methodist University

DOI:

https://doi.org/10.47941/ijf.39

Keywords:

Fund Transfer Agencies, Liquidity, Acid Test Ratio, Average Collection Period

Abstract

Purpose: The main objective of this study was to investigate the impact of fund transfer agencies to liquidity management of KPLC.

Methodology: A descriptive case study research design was used. The population for the study included all the 82employees in the KPLC Mombasa Branch. A sample of 57 respondents was selected from the population using a stratified random sampling technique. A questionnaire was the preferred data collection instrument. The data was analyzed by use of descriptive statistics such as mean, mode and median.

Results: The study findings showed that there was a gradual decline in the average collection period. This implied an improvement in the average collection period of KPLC Mombasa over the year 2002 to 2010. In addition, the number of fund transfer transaction increased over the study period. This implied that the fund transfer transactions may have impacted on the average collection period. Further, according to this study it was possible to infer that there was a gradual increase in the acid test ratio. This implied an improvement in the acid test ratio of KPLC Mombasa over the year 2002 to 2010. In addition, the number of fund transfer transaction increased over the study period. This implied that the fund transfer transactions may have impacted on the acid test ratio.

Unique contribution to theory, practice and policy: The study recommended that KPLC should engage more fund transfer agents in facilitating bill payments. Specifically, KPLC should engage more banks, Saccos, western unions and mobile operators. This is because such an approach would improve the average collection period and acid test ratio further.The study was purely descriptive; it therefore lacks the statistical rigor that would establish causation between fund transfer agencies and average collection period as well as the acid test ratio. Therefore, the study recommends a regression analysis to establish causation between dependent and independent variables.

Downloads

Download data is not yet available.

Author Biographies

Aisha M. Mohamed, Kenya Methodist University

Undergraduate student

Dr. C. M. Njoroge, Kenya Methodist University

Lecturer

References

Brealey, R. & Myers, S. (2003). Principles of corporate finance, (7thed.) New York: McGraw-Hill.

Chattopadhyay, R., & Duflo, E. (2004).Women as policy makers: Evidence from a randomized policy experiment in India. Econometrica, 72(5), 1409-43.

Cooper, D., & Schindler, P. (2007).Business research methods, (3rded.). Tata McGraw-Hill Publishing Company Limited, New Delhi.

Enhardt, M., & Brigham, E. (2009).Corporate cash flow: A focused approach, (3rded.). Cengage Learning Press.

Ferreira, M., & Vilela, A. (2004). Why do firms hold cash? Evidence from EMU Countries. European Financial Management, 10(2), 295-319

Jarvis, R., Kitching, J., Curran, J., & Lightfoot, G. (1996).The financial management of small firms: An alternative perspective", ACCA Research Report No. 49

KPLC (2009).Annual Report

KPLC (2010). Right Issue Information Memorandum

Kumar, R. (2005).Research methodology: A step-by-step guide for Beginners,(2nded.). Sage Publications, London. Thousand Oaks. New Delhi.

Mugenda, O. M., & Mugenda, A. G. (2003). Research methods: Quantitative and qualitative approaches (2nded.).Acts Press, Nairobi, Kenya

Padachi, K. (2006). Trends in working capital management and its impact on firms' performance: An analysis of Mauritian small manufacturing firms. International Review of Business Research Papers, 2(2), 45 -58.

Pandey, I.M. (2006).Financial management: (9thed.).Vikas Publishing House PvT Ltd, New Delhi-India.

Rafuse, M. E. (1996). Working capital management: An urgent need to refocus. Journal of Management Decision, 34 (2), 59-63.

Ross, S., Westerfield, R., Jaffe, J., & Jordan, B. (2008).Modern financial management, (8thed.). New York: McGraw-Hill.

Van Horne, J. (1995). Financial management and policy (10thed.). Englewood Cliffs: Prentice Hall

Weston, J., &Copeland, T. (1986). Managerial finance. (8thed.) Hinsdale: The Dryden Press

Downloads

Published

2017-01-24

How to Cite

Mohamed, A. M., & Njoroge, D. C. M. (2017). AN INVESTIGATION INTO THE IMPACT OF FUND TRANSFER AGENCIES ON LIQUIDITY OF FIRMS (A CASE OF KENYA POWER & LIGHTNING COMPANY LTD). International Journal of Finance, 1(1), 66–83. https://doi.org/10.47941/ijf.39

Issue

Section

Articles