School of Business and Economics

The use of e-procurement on performance of procurement functions of Uasin Gishu county government, Kenya

Wed, 01 Jan 2025 00:00:00 GMT

The use of e-procurement on performance of procurement functions of Uasin Gishu county government, Kenya JEPKOSGEI, Imelda In recent years, Uasin Gishu County Government has faced persistent challenges in its procurement processes, including inflated procurement costs, delayed service delivery, limited transparency and procurement-related irregularities issues consistently highlighted in reports from the Office of the Auditor General. These inefficiencies, often stemming from the continued use of manual procurement systems, have prompted the county to adopt e-procurement as a strategic solution. E-procurement involves the use of digital technologies to streamline procurement activities such as tendering, requisitioning, communication with suppliers and contract management. The present study seeks to examine the use of e-procurement on performance of procurement functions of Uasin Gishu County Government, Kenya. The study was guided by the following specific objectives; to examine the use of e-informing on performance of procurement functions; to determine the use of e-auction on performance of procurement functions; to establish the use of e-contract management on performance of procurement functions and to investigate the use of e-requisition on performance of procurement functions. The study was anchored on dynamic capability theory. The study adopted a qualitative case study approach. The data collection methods were interviews and observations for primary data and documents review for secondary data. Purposive sampling was adopted when selecting participants. The participants were 12 procurement officers who comprised of director procurement, deputy director and ten heads of procurement officers of various departments of Uasin Gishu County Government. Validity and trustworthiness of the study was handled by credibility, transferability, dependability and confirmability (Interviews, observations and document reviews). Thematic data analysis technique was used to analyze data. The analyzed data was presented in narratives and direct quotes. The study findings indicated that that e-procurement has a positive influence on the performance of procurement functions in county governments. E-procurement streamlines and automates various procurement processes, such as vendor registration, bid solicitation, bid evaluation, contract management and invoice processing. Based on the findings, the study recommends full adoption and continuous upgrading of e-procurement systems to improve efficiency, reduce corruption and strengthen service delivery. The results are significant for county governments, policymakers and procurement professionals seeking to optimize procurement functions and they contribute to policy development, institutional reform and future research in public sector procurement. Master's Project

Effect of economic, institutional and social factors on access to Youth Enterprise Development fund in Migori county, Kenya

Sun, 01 Jan 2023 00:00:00 GMT

Effect of economic, institutional and social factors on access to Youth Enterprise Development fund in Migori county, Kenya OGEMBO, Mordecai Atinga More than 50 percent of the current global population aged 15-24 years, survive on below 2 dollars daily. This state of affairs is particularly pronounced in less developed economies like Kenya where youths are subjected to problems of unemployment, job insecurity as well as low incomes. Youth Enterprise Development Fund (YEDF) supports the social pillar of the Vision 2030 towards addressing challenges of poverty as well as unemployment among youths in Kenya. The World Bank’s Global Findex Database reports that 71 percent of youths from high- income economies save and access credit while 43 per cent have been reported from developing countries. However, access to YEDF has been all-time low in Kenya covering only 30 to 35 percent. The reviewed studies have mainly concentrated on the effect of YEDF in eradicating poverty and youth unemployment by studying the youths who have accessed the funds but they have neglected those who have not accessed the funds and why. The purpose of this study was to investigate effect of economic, institutional and social factors on access to YEDF by youth groups in Migori County. The specific objectives of the study were; to investigate the effect of economic factors on access to YEDF, to determine the effect of institutional factors on access to YEDF, and to analyze the effect of social factors on access to YEDF in Migori County. This study was founded on information assymetry theory. It used correlational research design. Targetting all the 293 registered youth groups and 8 representatives of Youth Enterprise Development Fund in each Sub-County of Migori County, Yamane formula was used to determine the sample size. Cluster, proportionate and simple random sampling were adopted in which 169 youth group leaders and 8 administrators of the YEDF were selected for the study which gave rise to 177 respondents. Questionnaire and interview schedule assisted in gathering primary data. Piloting of the study was carried out to ascertain the validity and reliability of the data collection instruments. Given the economic factors, the study found that income status and access to YEDF in Migori County have a positive and significant relationship (.200, p=0.000). However, business support services and access to YEDF in Migori County have a positive but an insignificant relationship (.035, p=0.599). Likewise, the findings indicated that institutional factors (disbursement procedures and physical location of youth groups) and access to YEDF in Migori County have a positive and significant relationship (.118, p=0.026; .244, p=0.000 respectively). Likewise, social factors (education level, entrepreneurship training and group dynamics) and access to YEDF in Migori County have a positive and significant relationship (.240, p=0.000; .214, p=0.001 and .208, p=0.000 respectively).This is evidenced by the R square value which is 0.781 which is more than 0.5 implying that all the three factors explain 78.1% of the access to YEDF in Migori County. This is further supported by the Fstatistic = 66 where the value was greater than the critical value at 0.05 significance level, F statistic = 66 > F critical = 2.669 (7, 133). The study recommends that the low-income earners be reached for inclusivity; YEDF loan disbursements procedures be simplified; the YEDF offices be located also in remote parts of the country for ease of accessibility and entrepreneurial training be offered to youth groups. The outcome study would be useful in enhancing the understanding of factors affecting access to YEDF and help in formulating strategies to improve access, use and repayment of YEDF. The study concludes that the economic, institutional and social factors affect access to YEDF in Migori County.

Effects of rural tourism practices on socio-economic Development of communities living in Machakos county

Sat, 01 Jan 2022 00:00:00 GMT

Effects of rural tourism practices on socio-economic Development of communities living in Machakos county SIMIYU, Wanyama Ronald Rural tourism has grown in prominence over the last decade and is considered as a tool for revitalizing rural economies including Machakos County in Kenya. Machakos County is endowed with vast touristic resources that can be used to package rural tourism products with a view of enhancing socioeconomic development of the community in the county. Despite this, the community is still faced with socioeconomic issues at large. Previous studies have indicated positive relations between rural tourism practices and socioeconomic development. These studies, however, have mainly been done in developed economies with focus on isolated components of rural tourism yet enormous socioeconomic benefit can be realised by integrating agritourism, cultural tourism and ecotourism practices. The main objective of the study was to investigate the effects of rural tourism practices on socioeconomic development of community in Machakos County. Specifically, the study set to determine the effect of agritourism practices on socio economic development of the community in Machakos County; identify the effect of cultural tourism practices on socio economic development of the community in Machakos County; and determine the effect of ecotourism practice on socio economic development of the community in Machakos County. The study adopted a quantitative research approach with an explanatory census survey design. Self-administered questionnaires were distributed to 191 employees drawn from 31 targeted attraction sites in Machakos County. Descriptive statistics was used to understand the data as well as the demographic profile of the respondents. Multiple linear regression analysis was used to address the research objectives and test the corresponding research hypotheses. The study findings indicated that cultural tourism practices (β = .345, t = 3.692, p < .001), ecotourism practices (β = .342, t = 2.960, p = .004) and agritourism (β = .296, t = 4.389, p < .001) were all significant predictors social economic development among the community living in Machakos County, Kenya. The results indicate that all the three main rural tourism practices accounted for 46.8% of the variation in socioeconomic development of community in Machakos County. It was therefore recommended that Machakos county government need to strengthen partnerships with tourism stakeholders and enhance community sensitization while the local community should join in hand together with the tourism authorities to show case their products by setting up a location whereby the tourist can make a stopover and have a look at the display of their products and cultures.

Influence of selected behavioral factors on financial performance of deposit-taking saccos in Kenya

Sat, 01 Jan 2022 00:00:00 GMT

Influence of selected behavioral factors on financial performance of deposit-taking saccos in Kenya Asumani, Monicah Savings and Credit Cooperatives (SACCOs) are the major drivers of economic growth in developing countries and promise future growth and departure from poverty among the low economic regions. In Kenya, there was an increase in total assets from 556.7 billion in 2020 to 627.7 billion in 2021, which represented a 12.7% growth. The gross loans grew from 419.6 billion in 2019 to 474.8 billion in 2020 representing a 13.2% increase. However, SACCOs have continuously faced with large membership withdrawals, withholding of deposits and reduced share contributions. Previous studies concentrated on investigating the facilities offered by SACCOs, number of customers among the main factors in determining the SACCOs financial performance. Some other factors affecting the financial performance of SACCOs emanate from behavioral finance aspects which has received little focus on. This study sought to establish the influence of selected behavioral factors on the financial performance of deposit-taking SACCOs in Kenya. The specific objectives of the study were: to establish the effect of customers’ credit-risk behavior on financial performance of deposit taking SACCOs in Kenya, to determine the influence of customers’ transactions behavior on the financial performance of deposit-taking SACCOs in Kenya and assess the effect of management overconfidence on financial performance deposit-taking SACCOs in Kenya. The study adopted cognitive dissonance and the theory of behavioral finance. A correlational research design was used to establish the association between selected behavioral factors and the financial performance of the deposit-taking SACCOs. The study population was 175 deposit-taking SACCOs licensed by to undertake deposit-taking business in Kenya. The study used census method of sampling and a total of 150 deposit-taking SACCOs were analyzed. Secondary data on selected financial performance indicators were obtained using a data collection sheet from SACCOs financial statements covering from 2015 to 2021. Reliability was tested using the Levin-Lin-Chu unit root test and data was found to be stationary, while face validity was ensured using experts judgment and the tool was approved as valid. Both descriptive and inferential data analysis methods were used in the analysis, Linear and multiple regression analysis was also used. Results were presented using graphs and tables. The findings revealed that selected behavioral factors explains 22% variation of financial performance of deposit-taking SACCOs (R2= 0.22). The results further indicated that customer’s transaction has positive and significant effect; (B =0.015, p=0.000) on financial performance of deposit-taking SACCOs in kenya; management overconfidence negative and significant effect; (B =-0.043, p=0.000) while customer credit risk behavior has a positive and significant effect (B=0.687, p=0.000) on financial performance of deposit-taking SACCOs in Kenya. This implies that both customer transaction behavior and credit risk behavior positively and significantly affect financial performance, while management overconfidence negatively and significantly affects financial performance of deposit-taking SACCOs in kenya. The study recommended that SACCOs encourage more transactions and confidence among managers but take more precautions in lending. It is expected that the findings may be substantial for the scholars and will aid the stockholders improve their behavioral financial management to boost returns on their shares.

Determinants of credit accessibility in the informal sector: the Case of smallholder businesses in Migori county, Kenya.

Sat, 01 Jan 2022 00:00:00 GMT

Determinants of credit accessibility in the informal sector: the Case of smallholder businesses in Migori county, Kenya. Onyango, Francis Ojwang The informal sector, estimated to constitute 98% of businesses in Kenya, represents 83% of total employment and created 768,000 new jobs which represents 90.7% of total new jobs created in 2019 alone. Despite the critical role played by the sector in job creation and employment, it is faced with numerous challenges and constraints one of them being access to credit. Access to credit does not only have adverse effects on the informal smallholder businesses alone but on the entire economy. The study seeks to analyze the determinants of credit accessibility in the informal sector for the smallholder businesses in Migori County. The specific objectives of the study were to identify and determine the effects of the Demographic, Socio-Economic, and the Institutional factors that significantly affect credit accessibility by the smallholder businesses in Migori County, Kenya. The study employed descriptive survey research design. Targeting 4,756 traders in total, a three-stage stratified random sampling method was employed to select the smallholder traders in the study area represented by a sample size of 476 businesspersons. Structured questionnaires and interview schedules were developed, pre-tested and used for collecting quantitative data for the study. Piloting of the study was carried out to ascertain the validity and reliability of the data collection instrument. The targeted sample smallholder businesspersons successfully interviewed were 446 in total, representing a response rate of 93.70%. Descriptive statistics and the logit model were used in analyzing quantitative data. The output from the study model indicates that 245(54.9%) of the sampled businesspersons were credit users whereas the remaining 201(45.1%) were non-credit users. Of the demographic factors (gender, age and educational level), only one variable (age) significantly and positively affected credit accessibility by the smallholder traders at 5% level (.045, p =.036). The result was consistent with the prior expectation that those with higher age may have more access to credit from the formal sources than their younger counterparts. The gender of the respondents was statistically insignificant and negatively related to credit accessibility in the study area (-.254, p =.567), contradicting the expected hypothesis that males have more access to credit. The level of education was categorized into three mutually exclusive levels namely less than high school, high school, and college/ university levels. Two dummies for the level of education were statistically insignificant though related consistently to the prior research expectations. For those with less than high school education, access to credit by the smallholder businesspersons was negatively related and statistically insignificant (-1.078, p =.130), consistent with the a priori expectation. The estimated coefficient was consistent with the a priori expectation even though statistically insignificant (.70, p =.895) for those with high school education. The dummy variable for college/university level of education did not show significant variation among the sampled businesspersons. For this reason it was not retained in the model. Experience in credit use, one of the socio-economic factors expected to influence credit accessibility was statistically significant and positively related to credit access at 1% probability (.335, p = .001), in line with the prior research expectations. Even though positively related and consistent with the a priori expectation, the contribution of the propensity to take risks by the smallholder businesspersons was insignificant (.515, p = .743) at 5%. However, all the institutional factors were found to be statistically insignificant and negatively related to credit accessibility. Even though consistent with the a priori expectation, the contribution of distance from credit source in the prediction of the model was insignificant at 5% (-.034, p = 0.215). Membership by the smallholder businesspersons to multi-purpose cooperatives and or business associations was negatively and insignificantly related to credit access by the same group in the study area, contradicting the a priori expectation (-.274, p =.529). The outcome of the study would be useful to policy makers, MFIs, academicians and future researchers in identifying innovative options and institutional arrangements that would serve as an input for formulating credit policy and advancing arguments in future research. The study concludes that a large number of the informal sector smallholder businesspersons have never accessed credit which implies a very huge potential demand for credit.

Analysis of inflation, interest rate, exchange rate and financial performance of real estate investment, Kenya

Sat, 01 Jan 2022 00:00:00 GMT

Analysis of inflation, interest rate, exchange rate and financial performance of real estate investment, Kenya ODHIAMBO, Austine. Ogutu Real estate as an investment has continued to form an important part of investments held by both retail and institutional investor’s portfolio over the years. This has been attributed to its ability to generate continuous income streams as well as capital appreciation of the underlying asset. Notwithstanding these benefits, real estate investments in Kenya have been faced with challenges such as increased cost of credit through fluctuating interest rates owing to real estate being mostly financed by debt hence unstable interest rates can affect their performance. Real estate as an investment has been susceptible to booms and bust and erratic exchange rates which affect the value of investments made by both local investors and remittances from abroad from time to time which results in either inflated property prices which get out of reach of common retail investors or lack of demand for investors in a market facing glut. Over the years inflation has been rising steadily with each investor becoming more interested on how this might affect their real return. Real estate which is heavily leveraged has also been prone to changes in the interest regime in the economy which affects the cost of borrowingIt is upon this that the study was conducted to establish the state of connection between the performance of real estate investment from a price and return perspective. The study concentrated on inflation, the interest rate regime and the state of exchange rate and drew conclusions based while referencing finance and economic theory. The study focused on the weighted interest rates used in lending by commercial banks, inflation rates exchange and the existing relationship with the financial performance of real estate investments. The study was anchored on the four quadrant model to show how real estate sector demand and supply works out. The study used Arbitrage Pricing theory to show how real estate performance is influenced by macro-economic factors. Lastly the study used the Efficient Market Hypothesis to show that real estate prices and market is efficient. The research adopted a post positivist research philosophy and was guided by a correlational research design. The target population for the study was 40 quarters of interest rates, housing price index from Kenya Bankers, inflation rate, exchange rate and growth of real estate sector in Kenya. The macro economic data for the study was retrieved from Kenyan National Bureau of Statistics between 2012Q1 and 2021Q4. The results from the study showed that in the long run, inflation had a significant influence (b=2.058), exchange rate had a significant negative influence (b= -2.017), interest rate had a significant positive influence (b=8.166) respectively on real estate residential property prices. On the same note in the long run exchange rate had a significant negative influence (b= -0.0043), inflation had a significant positive influence (b=0.001268), and interest rate had a significant positive influence (b=0.0043) respectively on real estate sector growth. The short run relationship showed that interest rate, exchange rate and inflation had a significant relationship with real estate residential prices. The study however established that there was no significant short run relationship between exchange rate, inflation and interest rate with real estate sector growth. The speed of correction back to equilibrium for real estate residential and real estate growth were negative and significant at 46.4% and 31.4% respectively. The study recommended investors to have their portfolios diversified by investing in real estate to hedge against inflation. Since real estate was established to be interest rate sensitive, the study recommended investors to limit bonds which are also interest rate sensitive in portfolios that have real estate. Lastly the study recommended investors to protect their portfolios from exchange rate risk through investing in futures contracts which cancel out any adverse changes in the exchange rate regime in the country.

Analysis of financial control practices on performance of manufacturing firms in Kisumu county, Kenya

Sat, 01 Jan 2022 00:00:00 GMT

Analysis of financial control practices on performance of manufacturing firms in Kisumu county, Kenya MUMBUA, Felistus. Kiusya Globally, manufacturing play a vital role in an economy of any nation as evidenced by its increase in Gross Domestic Product which is approximated $2.1 trillion in GDP (12.5% of total U.S. GDP) and industry supports almost 17.1 million indirect employment in the United States, together with 12.0 million people directly absorbed in the industry, from summation of 29.1 million direct and indirect jobs offered, a number higher than 21.3% of total U.S. employment. In Kenya, 71% of the manufacturing firms shut down in their third year of operation due to lack of operating funds. Importantly, their level of contribution to country’s GDP is only 1%. Records from Kisumu County, in fiscal year 2019/2020, indicates that manufacturing firms recorded a loss averaged 5%. However, this state of affairs may further be threatened by poor financial control practices. Previous studies attribute this poor performance to regulatory and corporate risk among other causes. The study purposed to analyze financial control practices on performance of manufacturing firms in Kisumu County, Kenya. Study objectives were to: determine the effect of asset control practice on performance; determine the effect of audit control practice on performance and determine the effect of budgetary control practice on performance of manufacturing firms in Kisumu County. Study was anchored by four theories namely: Finance Distress Theory, Shareholder Wealth Maximization Theory, Agency theory and Accountability Theory. Study employed correlational research design. Population targeted were thirteen (13) manufacturing firms in Kisumu County and a census survey was employed. Collection of primary data was aided by questionnaires administered to 36 employees drawn from production/operations, finance and accounting sections of the manufacturing firms. Pilot study involving three respondents was conducted and analyzed using Cronbach’s alpha whose values were all 0.7 and above indicating reliability of the instrument. Data analysis was done using descriptive and inferential statistics such as frequencies, percentages, mean, standard deviation and multiple regression analysis. The findings of the study were that asset control (B = -.228, p = .106) and audit control practices (B = -.393, p= 0.056) are negative predictor of performance implying that practice of asset control and audit control practices lead to erosion of performance. In addition, budget control practice positively and significantly influenced performance (B = .466, p= 0.005) implying that practice of budgetary control leads to increase in performance among manufacturing firms in Kisumu County. The findings from this study could be beneficial to policy makers in manufacturing firms and Government in setting policies in governing the operations of manufacturing firms in Kenya; shareholders before deciding on which investment to make that maximizes wealth and academicians use it as ground for further research.

Influence of financial literacy on saving behaviour among small scale entreprenuers in Kisumu central constituency Kisumu county

Sat, 01 Jan 2022 00:00:00 GMT

Influence of financial literacy on saving behaviour among small scale entreprenuers in Kisumu central constituency Kisumu county KOMEN, Chepchirchir. Sarah African nations still have to bring up residential reserve funds rates compared to their per capitaGDPs as they are doing poorly compared to their East Asian and Pacific partners and that ifAfrica saved more both household saving andas countries they would use those funds forinfrastructure instead of raising the funds through external debt. World Bank Development Indicators' most recent data reveals that the nation's Gross Domestic Savings as a proportion of GDP was 11.09 percent in 2017, 11.64percent in 2018, 11.25 percent in 2019 and 12.83 percent in 2020. This shows that the country’sdomestic savings is increasing but relatively low. As a result of this the country presents asignificantdevelopmentchallenge. Individuals need to learn the basic knowledge of financial areas so that people may make knowledgeable financial decisions about how to earn, spend, save, manage, and invest their money. The study's goal was to look at the impact of financial literacy on small-business owners in the Kisumu Central Constituency's saving habits. The study's particular objectives were to; establish theinfluence of debt management on saving behavior, examine the influence of budgeting practiceson saving behavior and establish the influence of investment management practices on savingbehavior among small entrepreneurs in Kisumu Central Consistency. The study wasguided by Life Cycle Theory, Financial Literacy Theory and Permanent income hypothesis.Correlational research design was employed in the study. The target population comprisedof 914 registered small entrepreneurs in Kisumu town central constituency who have been inbusiness for at least2years. The study adopted Yamane sampling technique. Open-ended and closed-ended structured questionnaires were employed to gather primary data. 28 questionnaires were used in a pilot study by the researcher to make sure the questions were reliable, valid, and pertinent. Statistical Package for Social Sciences was used for data analysis (SPSS) that were presented on figures and tables. The findings indicate that debt management and saving behavior among small scale entrepreneurs were strongly and positively correlated as shown by r= 0.952, statistically significant p=0.000˂0.05; budgeting practices and saving behavior among small scale entrepreneurs strongly and positively correlated (r=0.919, p=0.000˂0.05); investment management practices and saving behavior among small scale entrepreneurs were very closely associated and positively skewed (r=0.91, p0.0000.05). According to the study's findings, small-scale business owners in Kisumu Central Constituency have a high and favorable correlation between debt management, budgeting techniques, investment management strategies, and saving habit. Therefore, the study suggests that components of financial literacy include debt management, budgeting techniques, and investment management should be imparted among small scale entrepreneurs in Kisumu central constituency, Kisumu County. This will enable them to make financial decisions and thus realize saving behavior.

Analysis of asset financing and return on investment in commercial real estate investment firms in Kenya

Sat, 01 Jan 2022 00:00:00 GMT

Analysis of asset financing and return on investment in commercial real estate investment firms in Kenya KOILE, Salia. Rossi Real estate commercial environment has guided financial organizations and property developers to examine various financing options given the imperative role that financial markets and developers play in the performance of the real estate sector. The objective of this study was to analyse asset financing and return on investment in commercial real estate investment firms in Kenya. The following aspects formed the particular objectives of the study; to establish the effect of loan uptake on return on investment in commercial real estate investment firms in Kenya, to assess the effect of interest on loan on return on investment in commercial real estate investment firms in Kenya and to analyze the effect of financial solvency on return on investment in commercial real estate investment firms in Kenya. The study was anchored on Simulation Theory, The Pecking Order Theory, Ratio Analysis Theory and Profit Maximization Theory. The population of interest in the study was made up of registered property developers with Kenya Property Developers Association. The research employed secondary sources to collect data. Information that was relied on included the data from published and audited annual reports of the target group. This study employed a correlational research design and utilized panel data for the period 2017-2021. Data was collected from audited reports which are deemed reliable and valid and was tested for stationarity by Levin, Lin, Chu unit root test. The data was tested for normality, heteroscedasticity and multicollinearity condition satisfaction. Data was analysed using ordinary least squares approach and the regression was multivariate panel data in nature at 0.05 level of significance. Data analysis was done with the help of Eviews and presented in tables. The research findings were that loan uptake has a negative significant effect (β = -0.0738, p = 0.0034) on return on investment in commercial real estate, interest on loan positively significantly affects return on investment (β = 0.0309, p = 0.0499) and financial solvency positively significantly affects return on investment (β = 0.5434, p = 0.0132) in commercial real estate investment firms in Kenya. Interest on loan accounts for return on investment of 3.09% and financial solvency accounts for return on investment of 54.3%. The research concludes that the three variables under study had some influence on the return on investment of the commercial real estate as part of explaining their development. This research study recommends that there needs to be awareness created on need to use other financing options that are cheaper in the long run. This study contributes to the body of knowledge by providing the link between asset financing and return on investment in commercial real estate investment firms in Kenya. Masters project

Effect of macroeconomic variables on financial performance of real estate sector in Kenya

Sat, 01 Jan 2022 00:00:00 GMT

Effect of macroeconomic variables on financial performance of real estate sector in Kenya OWARE, Samwel. Onyango Real estate has become a major investment globally. Growth in Real estate industry in terms of sales and prices have been used to predict the real estate demand and general economic performance. In Kenya, the real estate sector contributes approximately 9% of GDP despite the declining performance with average uptake from 23.3% in 2017 to 20.9% in 2018. The decline could be attributed to capping of interest rates leading to banks reducing funding to the sector, rise in the sector non- performing loans (NPLs) by 48.0% within the same period, increase in cost of construction, increased competition amidst falling demand caused as may be caused by several other macroeconomic factors. This have equally led to loss of jobs, migration of investors and declined sector performance in general. The relationship between macroeconomic variable and general performance of real estate have attracted considerable scholarly analysis and inconsistent results have been reported across the globe. The effect of macroeconomic factors on financial performance of real estate in Kenya market have not been adequately addressed. Therefore, this study evaluated the effect of macro-economic factors on financial performance of real estate sector in Kenya. Specific objectives were to analyse the effect of interest rate, inflation rate and exchange rate, on financial performance. The research research was anchored on the theory of classical interest rate classical inflation rate and balance of payments theory of exchange. This study used a correlation research design .The population for this study was real estate sector in Kenya. The study utilized secondary data collected from Central Bank of Kenya depository KNBS Economic Survey Reports from 2010 to2020.Datawasanalysed using both descriptive and inferential statistics. The study found that inflation rates showed a declining trend with mean rate of 7.02 , insignificant negative weak correlation and a partial effect of 0.191 insignificant positive change on financial performance; a declining trend interest rate with a mean rate 10.1, negative weak correlation and a insignificant partial effect 0.734 negative change on financial performance; and an upward trend in exchange rate with a mean of 86.30; significant strong positive correlation and significant partial effect 0.926 positive variation on financial performance of real estate in Kenya. The study concluded that exchange rate has significant effect on financial performance of real estate in the Kenyan market, while inflation rate and interest rate has no significant effect on financial performance of real estate in the Kenyan market. Masters Thesis