Effect of Joint Venture Financing on the Level of Operational Risk Among Affordable Housing Developers in Kenya

Abstract

This study investigated the impact of joint venture financing on operational risk reduction within the context of affordable housing development in Nairobi, Kenya. Data for this research were collected through a structured questionnaire administered to 55 affordable housing project developers, yielding a response rate of 93.22%. The questionnaire gathered information related to respondents' background, management level, education, work experience, and perceptions of joint venture financing and operational risk. The collected data were subjected to rigorous statistical analysis, including regression modeling and analysis of variance. The findings revealed a strong positive relationship between joint venture financing and operational risk reduction, as indicated by a high correlation coefficient (R = 0.787) and a significant coefficient of determination (R Square = 0.619). This suggests that increased utilization of joint venture financing strategies is associated with improved operational risk reduction. The analysis of variance (ANOVA) further validated the statistical significance of the regression model, confirming that joint venture financing is a key factor contributing to the variation in operational risk reduction. The regression coefficients indicated that specific components of joint venture financing, such as financial strategy partnerships, research synergy, collaborative funding, and resource combination, all play a statistically significant and positive role in reducing operational risk. This study underscored the importance of fostering financial partnerships and collaborative strategies to mitigate risk within the affordable housing development sector. The findings have implications for policymakers, industry stakeholders, and affordable housing developers seeking to enhance risk management practices and promote sustainable housing development in Nairobi