Financial distress is a common global phenomenon among the corporate entities. Locally, there is overwhelming evidence of firms that have undertaken financial restructuring, delisted from the exchange market, gone into receivership and subsequently liquidated on account of financial distress. This study therefore set out to examine the way in which management of working capital affects financial distress of non-financial firms listed at the Nairobi Securities exchange. In fulfilling this objective, the study sought to establish how cash management, inventory management and accounts receivables management effects financial distress of non-financial firms listed at Nairobi Securities Exchange. The free cash flows theory, Precautionary motive theory, financing advantage theory and liquidity theory formed the theoretical basis of the study. The study adopted longitudinal research design and collected secondary data over ten years period (2009-2018) from a census of the 40 non-financial firms listed in Nairobi Securities exchange. Descriptive statistical analysis was used to obtain the initial overview of the data collected. Inferential statistical analysis was undertaken using the F and t-tests at 95% confidence level. The study found that cash management had a positive and significant effect on the firms’ distress index. Further, the study revealed that inventory holding period was negatively and significantly related to the firms’ financial distress index. The study also showed that suppliers’ payment period had a positive and significant effect on financial distress indicator. The study however depicted a negative but insignificant relationship between receivables period and financial distress. The study recommended that the management of non-financial listed firms should ensure appropriate management of working capital components in order to guard against instances of corporate financial distress JEL: O15; J24; L20 <p> </p><p><strong> Article visualizations:</strong></p><p><img src="/-counters-/edu_01/0778/a.php" alt="Hit counter" /></p>

This paper sought to establish the moderating effect of firm size on the relationship between capital structure and financial distress of listed non-financial firms in Kenya. Firm size was measured using the natural logarithm of total assets while capital structure was operationalized by total debt, long-term debt and short term debt financing. The degree of financial distress was measured using the Altman's Z-score index as reviewed for the emerging markets. Secondary data from audited and published financial statements was collected on the 40 listed non-financial firms between year 2006 and 2015. The study estimated the specified panel regression model for fixed effects as supported by the Hausman test results. Feasible Generalized Least Squares (FGLS) regression results revealed that firm size has a significant moderating effect on the relationship between capital structure and financial distress of non-financial firms. Specifically, the study found that although generally debt has a negative and significant effect on financial distress of the studied companies, this effect becomes positive and significant as the size of the firm increases. The study further found that use of long term debt has a positive and significant effect among largescale firms while short term debt is significantly detrimental. On the basis of these empirical findings, the study recommended that managers of listed non-financial companies should always consider the size of the firm in making leverage choice decisions for their entities.

Credit default risk has been cited as the primary cause of bank failures in Kenya. Between 1984 and 1991 there were a total of 29 bank failures reported. This is an alarming rate given that it represents on average two or more bank failures per year during that period. Though this trend has been reversed, credit default risks continue to be a major challenge among banks. The main objective of the study is to establish the effect of credit risk management practices on performance of commercial banks in Kenya. Particularly, the study examined the effect of loan appraisal, lending requirements, credit management tools and loan recovery process on financial performance of commercial banks in Kenya. The study adopted descriptive research design. The target population were all the licensed commercial banks operating in Kenya by the year 2017 as reported in the Bank Supervisory Report 2017. The unit of observation comprised the credit officers and finance managers of the commercial banks. A census was adopted on all the 39 commercial banks hence a total of 78 respondents were targeted. The study used both primary and secondary data. The study findings revealed that loan appraisal, lending requirement, credit management tools and loan recovery process had a positive and significant relationship with the financial performance of commercial banks in Kenya. The study recommended that commercial banks need to establish an overall credit limits at individual borrowers as well as clearly establish a process for approving new and refinancing of existing credits. Further, there is need for follow-up on payment schedule of borrowers and reminding customers before maturity. The commercial banks also need to develop a well-documented lending procedure, do lending against its lending standards, set lending policies in line with the market requirement as well as develop well-established lending policies regarding interest rates

<p>Despite the decade-long existence of Credit Reference Bureaus in Kenya, lenders continue to grapple with a high prevalence of non-performing loans. However, available studies associate credit referencing with a reduction in bad loans among financial institutions. This is however doubtful considering the consistent rise in non-performing loans within the banking sector over the same period. It is this contrast that has motivated a follow-up study to establish an accurate empirical position. The study sought to investigate how credit referencing influences loan performance among Kenyan lenders. The study was anchored upon the Information asymmetry theory. The study adopted the descriptive survey research design and targeted 39 commercial banks and 14 registered microfinance banks operating in Kenya as of 31st December 2020. The study selected 21 commercial banks using a stratified sampling plan based on the 3 tiers as defined by the Central Bank of Kenya. It also included four microfinance banks. Structured questionnaires were used to collect primary data on the independent variable and a data collection sheet was used to collect secondary data on the dependent variable over a 10-year period. Respondents comprised the branch managers and credit officers. Both descriptive and inferential statistical analysis techniques were employed to obtain the findings of the study. The findings of the study showed that all the credit referencing parameters were negatively but insignificantly related to loan performance among Kenyan lenders. Consequently, the study recommended that the management of the banking institutions should pay close attention to the adverse credit information relating to borrowers. Further, banking institutions should operationalize a differentiated credit pricing model as a mechanism to reward borrowers with good credit history. The Central Bank of Kenya should also strengthen the banking supervision function so as to negate the growing trend in non-performing loans among the lenders by instituting appropriate sanctions.</p><p><strong>JEL:</strong> O15; J24; L20</p><p> </p><p><strong> Article visualizations:</strong></p><p><img src="/-counters-/edu_01/0551/a.php" alt="Hit counter" /></p>