DETERMINANTS OF CAPITAL STRUCTURE IN THE KENYA POLICE SACCO
Abstract
Capital market is the source of long term finance while Money market is the source of short term finance. The motive behind is to minimize the financial costs of funds rising. These financial decisions may be viewed by various capital structure theories: Static Trade Off, Free Cash Flows and Pecking Order theory to assess the influence of liquidity on the Capital Structure of Kenya Police SACCO in Kenya. This study generally sought to assess the influence of liquidity and growth on the Capital Structure of Kenya Police SACCO. The research study incorporated the use of descriptive research design utilizing secondary data which was collected from financial statements between 2013 and 2017. Data was analyzed by the use of descriptive and inferential statistics with the aid of SPSS and thereafter presented in the form of tables. The hypothesis was tested at significance level of 0.05 (95% confidence level). The results revealed that liquidity and growth had significant relationship with capital structure, therefore concluding that liquidity and growth are significant determinants of capital structure of Kenya Police SACCO. This study therefore recommended that SACCOs should aim at onboarding more members, in addition to mobilizing the existing members to increase their share contributions in an effort to build up the level of equity.
Keywords: Capital Structure, Liquidity, Growth, Kenya Police Sacco
CITATION: Omwenga, V. M., & Mironga, J. (2019). Determinants of capital structure in the Kenya police SACCO. The Strategic Journal of Business & Change Management, 6 (1), 379 – 386.
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DOI: http://dx.doi.org/10.61426/sjbcm.v6i1.1063
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