Effect of Government and Other Agencies Funding on the Performance of Water Service Providers Under Athi Water Services Board, Kenya

Abstract

The purpose of this study was to assess the effect of government and other agencies funding on the performance of water service providers under Athi Water Services Board. A descriptive research design was applied in this study. The target population of this study was the nine water company‟s under Athi Water Services Board. These include: Ruiru-Juja, Thika, Karimenu, Gatundu South, Githunguri, Kiambu, Limuru, Kikuyu and Karuri Water and Sewerage Co Ltd. The study collected secondary data from company‟s Audited Financial Statements for the Five years and also from the WARIS report submitted to WASREB. Quantitative analysis was used through descriptive statistics. Inferentially, a regression analysis was conducted to establish the coefficients of each variable of interests. From the findings, the three independent variables that were studied (funding sources/access to financing, cost of capital and risk financing pattern) explain a substantial 58.3% of performance of WSPs as represented by adjusted R2 (0.583). The study concluded that funding sources/access to financing positively and significantly influenced the performance of WSPs. The study also concluded that cost of capital negatively but significantly influenced the performance of WSPs. The study further concluded that risk financing pattern positively and significantly influenced the performance of WSPs. The study recommends that since funding sources/access to financing was seen to be a significant determinant of WSPs performance, the management should actively solicit for funding from the various sources from the development partners including focusing on possible PPPs. 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.