ICT Financing in Kenya, an Exploratory Study

This book explores the factors affecting financing of telecommunications companies in Kenya. The study targeted privately owned telecommunication companies in Kenya and the funding constraints they face. The findings of the study indicate that telecommunication companies in Kenya to a large extent source for funds externally (95%), many early life companies (0 to 5 years) have not fully benefited from the external funding for both for Operating expenditure (Opex) and capital expenditures (Capex). The main factors influencing sources of funds were identified to be decision making, interest rates, government policies, age of company, inflation and available sources of funds. Funding constraints included high interest rates, over-regulations, and slow pace of external funding procedures amongst many other challenges. Chi square and factor analysis was used to test relationship between identified variables and to test for reliability of the factors under study. Findings indicate that political instability is the most important determinant factor in funding. This must be strengthened to keep telecoms liquid in the long-run.