Determinants of Financial Performance of Public Transport Businesses in Kenya: Case of Kiambu County

Abstract

This report evaluates the determinants of financial performance of public transport business in Kenya, a case of Kiambu County. The report mainly focuses on matatus. The objective of this report is to evaluate the determinants of financial performance in public transport business in Kenya a case of Kiambu County. The study was conducted on selected owners of matatu businesses through questionnaires. Population of the study was Matatus plying the Kiambu Nairobi route. According to the Ministry of Infrastructure, there are seven registered Societies on Kiambu-Nairobi route with a total of 116 members. The targeted population therefore comprised of 116 investors in public transport business. The study used simple random sampling to select a sample of 56 investors from the population. Data was collected by use of questionnaires. The data collected was analyzed through use of SPSS software and the resulted interpreted. Regression analysis was used to establish the influence of SACCOs, Operatives culture and Government influence on financial performance at 0.05 level of significance. The findings presented also show that taking all other independent variables at zero, a unit increase in Influence of SACCOs lead to a 0.891 increase determining financial performance of public transport business in Kiambu County; a unit increase in operatives culture would lead to a 0.813 increase in determining financial performance of public transport business in Kiambu County; and a unit increase in government influence would lead to a 0.857 increase in determining financial performance of public transport business in Kiambu County. At 0.05% level of significance and 95% level of confidence, Influence of SACCOs had a 0.0209 level of significance; operatives culture showed a 0.0217 level of significance; investment deduction showed a 0.0224 level of significance while government influence showed a 0.0236 level of significance. Most matatu businesses are owner/self managed and that matatu businesses perform better when they are self/owner managed. Research findings conclude a relationship between both overall and operating strategies and the nature and level of regulatory compliance. The study also found that TLB taxes are deemed to be high as implemented on matatu businesses while county government taxes, levies, parking fees and other charges were seen to be fair by the matatu businesses. According to the findings on training and seminars, it was found that there is very little training as organized by the Saccos and that the little that is being done does not have an impact n the financial performance on the matatu businesses which is of importance for the sustenance of the businesses. It also found that compliance was selective, with operators following regulations deemed to be reasonable and possible. The findings conclude that compliance may be enhanced by promoting cooperation between Matatu owners and government in streamlining regulations and ensuring fair and consistent enforcement, as well as by recognizing that Matatus are legitimate transport businesses rendering a public service.