RISK MITIGATION AND FINANCIAL PERFORMANCE OF SELECTED COUNTY GOVERNMENTS, KENYA
RISK MITIGATION AND FINANCIAL PERFORMANCE OF SELECTED COUNTY GOVERNMENTS, KENYA
William Goko Gatehi - Student, School of Business and Entrepreneurship, Jomo Kenyatta University of Agriculture and Technology, Kenya
Dr. Joshua Matanda - Senior Lecturer, School of Business and Entrepreneurship, Jomo Kenyatta University of Agriculture and Technology, Kenya
Dr. Caleb Odhiambo - Lecturer, School of Business and Entrepreneurship, Jomo Kenyatta University of Agriculture and Technology, Kenya
ABSTRACT
County governments are grappling with a myriad of challenges comprising corruption, misappropriation of funds, lack of strong and capable regulatory mechanisms and poor leadership. They also have difficulties regard inadequate execution of strategic plans, delay in completion of development projects, and huge pending bills. The present study assessed the influence of risk management on financial performance of selected County Governments, Kenya. The study was anchored on strategic choice theory. A descriptive research design was employed. The target population was the Kenya’s county governments with special reference to Nyandarua, Bungoma, Murang’a and Kiambu County Governments, which thus are the unit of analysis. The unit of observation was 241 comprising 132 directors, 69 chief officers and 40 County executive committee members (CECMs). The researcher utilized questionnaire in data collection. The study used both descriptive and inferential methods for data analysis. Inferential statistics, on the other hand, are statistical techniques employed to derive conclusions regarding relationships between variables. A correlation and regression analyses were employed to establish the associations between variables. Data analysis was aided by Statistical Packages for Social Sciences (SPSS). The descriptive findings established that risk mitigation influenced financial performance. The correlation analysis results revealed the correlation coefficient (r=0.730**; p=0.000) for risk mitigation. This means that risk mitigation influenced financial performance significantly. The regression analysis results revealed a coefficient of determination of R2=0.825. This means that risk mitigation accounted for 82.5% of variation of the financial performance. As such, risk mitigation significantly affected the financial performance of Nyandarua, Kiambu, Muranga, and Bungoma County governments. The study concludes that that effective risk mitigation is essential for improving the financial performance of county governments. By implementing comprehensive frameworks that include proactive planning, clear communication, and robust policies, these governments can enhance their resilience and decision-making capabilities, ultimately enhancing financial performance. The study recommends that county governments should implement targeted risk mitigation strategies to promote better financial performance.
