| dc.description.abstract | A number of studies have been done in various firms viewing the problem of risk
management as the need to control risks which make up most, if not all, of their risk
exposure. Studies in Kenya have only focused on risk management practices of firms in
general without being specific on the financial risk management practices of
manufacturing industry. This study sought to establish the relationship between financial
risk management and efficiency of manufacturing firms in Kenya.
The researcher used descriptive design. The population was 50 manufacturing firms. A
sample of 40 firms was selected and 36 took part in the final survey. Both primary and
secondary data were collected. The primary data was collected using questionnaires while
secondary data was collected from the annual statements. Data was analysed using
descriptive analysis and regression analysis. The results are presented in tables.
The study found that the most managed financial risk in the manufacturing sector was
foreign currency risk (mean score = 4.22) while the least managed financial risk was
commodity price risk (mean score = 1.78). The study also revealed that currency risk,
interest rate risk, and commodity price risk management practices had insignificant
negative influences on firm efficiency (R = -0.121, -0.126 and -0.116 respectively). The
study concludes that financial risk management is negatively related with efficiency of
manufacturing firms in Kenya. The policy makers need to put up more stringent policies
for the manufacturing firms to better manage financial risks. The study recommends need
for manufacturing to entrench more measures to manage financial risks as the level of use
of instruments to manage such risks is still low. | en |
