FACTORS AFFECTING FINANCIAL STABILITY OF FINANCIAL SERVICE COMPANIES LISTED IN NAIROBI SECURITY EXCHANGE
Abstract
The purpose of the study was to examine the factors affecting financial stability of financial service companies listed in Nairobi securities exchange. The specific objectives of this study were: to establish the effect of macroeconomic factors on financial stability of financial service companies listed in Nairobi Securities Exchange and to examine the effect of savings on financial stability of financial service companies listed in Nairobi Securities Exchange. The population of the study consisted of all the 17 financial service companies consistently listed at the Nairobi Securities Exchange as at 27th July 2016. The research data was collected using a secondary data guide. Inferential statistics was used to analyze the relationship between independent and depended variables using linear regression. The study found that there was a strong positive correlation between financial stability of financial service companies and Macro-economic factors. The study revealed that macro-economic factors significantly affected financial stability of financial service companies. The study found that there was strong correlation between financial stability of financial service companies and savings. The study established that savings had positive significant effect on financial stability of financial service companies. The study recommended that there was need for the management of financial service companies listed in the NSE to factor macro environment factors when making in decision on financing. There was need for management of financial service companies listed in the NSE to use more of retained earnings in their investment.
Keywords: Macroeconomic Factors, Savings, Financial Stability, Financial Services, Nairobi Security Exchange
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DOI: http://dx.doi.org/10.61426/sjbcm.v4i4.587
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