A Survey of Foreign Exchange Risk Management Practices by Textile and Apparel Firms in Export Processing Zones in Kenya
Abstract
The aim of this research study was to identify the nature of foreign exchange risk exposure
faced by apparel firms in Kenya and to ascertain the foreign exchange risk management
practices employed by apparel firms in Kenya
The population of the study consisted of all 23 EPZ firms that were involved in production and
sale of apparel and garment in Kenya as listed in Kenya Export Processing Zone Authority
Qualitative primary data was used for the study. It was collected through self-detailed
administered questionnaires (see appendix II) that had been constructed using open ended, close
ended and Likert type of questions
The primary data collected from the questionnaire was analysed using descriptive statistics such
as measures of variation and measures of central tendency. The results were presented in the
form of frequency tables, charts and graphs where necessary. The data analysis method was
quantitative in nature using descriptive statistics where frequency and percentages were applied.
The study concludes that most firms did not have a risk department or section hence could not
also be in a position to have a documented foreign currency management policy.
The study also concludes that most firms had their Chief executive officers as the person
responsible for the risk management department.
The study also concludes that the firms had problems when it came to managing of foreign
exchange risks. Such problems included getting the right foreign currency mix and frequent
changes in exchange rates.
The study recommends that export processing zones firms should have a risk department or
section. This can be responsible for the identification, assessment, and prioritization of risks
followed by coordinated and economical application of resources to minimize, monitor, and
control the probability and/or impact of unfortunate events.
Citation
MBA ThesisSponsorhip
University of NairobiPublisher
University of Nairobi, School of business