Determinants of Financial Sustainability of Water Companies in Nyeri County.
Abstract
The unique potential of water companies to reduce poverty and sustain itself can easily be
lost if they are not committed to continue extending services to the low-income
households on a long term basis. The objective of this study was to investigate the factors
influencing financial sustainability of water companies operating in Nyeri County.
Descriptive case study design was adopted to answer the research problem which is to
investigate the factors that determine financial sustainability in water companies. Data on
the financial and operational performance of the firms was obtained from the Kenya
National Audit office, financial statements and Water Services Regulatory Board, sector
evaluation report by Water services Regulatory Board. The target population of this
study was the water companies in Nyeri County, Kenya. The study found that water
companies in Kenya though faces challenges, have enjoyed sustainable
Operationalization of business. Most water companies are cushioned against financial
losses being trustees and NOO funded. To ensure financial sustainability water
companies in Kenya have been providing differentiated access to finances which ensures
that they are able to meet their customer expectations. The water companies' financial
sustainability has been ensured by beefing up their service delivery and reducing credit
risks at the same time as well as obtaining finances from both local and international
donors. The study finally concludes that water companies' financial sustainability is
influenced positively by total operating income, net loan portfolio and funds from
government and donor agencies increases the water companies' sustainability and
negatively by debt equity ratio, total operating expenses and ave!age loan size. The study
recommends that water companies should solicit for more funds from donors, increase
the range of services they provide and beef-up their governance structure since financial
sustainability is achieved when service and infrastructure levels and standards are
delivered according to a long term plan.
Citation
Master of business Administration, University of Nairobi, 2013.Publisher
University of Nairobi,