ENTERPRISE RISK MANAGEMENT PRACTICES AND THE FINANCIAL SUSTAINABILITY OF WATER AND SEWERAGE COMPANIES IN KIAMBU COUNTY, KENYA
ENTERPRISE RISK MANAGEMENT PRACTICES AND THE FINANCIAL SUSTAINABILITY OF WATER AND SEWERAGE COMPANIES IN KIAMBU COUNTY, KENYA
Lydia Nyamweru Njeri - Postgraduate Student, Department of Accounting and Finance, School of Business Economics and Tourism, Kenyatta University, Kenya
Dr. Francis Gitagia (Ph.D), (CPA) - Lecturer, Department of Accounting and Finance, School of Business Economics and Tourism, Kenyatta University, Kenya
ABSTRACT
Financial sustainability as reflected by Operating Self Sufficiency has remained unstable among licensed water and sewerage companies in Kiambu County, fluctuating between modest surpluses and shortfalls and reflecting persistent weaknesses in cost recovery and exposure to operational and financial risks. The research’s overall objective was to examine the effect of enterprise risk management practices on the financial sustainability of licensed water and sewerage companies in Kiambu County, Kenya. Specifically, the study assessed the effects of risk identification, risk assessment, risk response, and risk monitoring practices on financial sustainability. The study was underpinned on Prospect Theory, Contingency Theory, RBV Theory, Agency Theory, and Financial Sustainability Theory. A descriptive research design was adopted targeting managers and senior officers drawn from the eight licensed water and sewerage companies in Kiambu County. Both primary and secondary data were used. Primary data were collected using structured questionnaires, while secondary data were obtained from audited financial statements. Data were analyzed using STATA through descriptive statistics and inferential techniques including Pearson correlation and multiple regression analysis. Data were presented using tables. Regression results showed that risk identification had a positive and statistically significant effect on financial sustainability, risk assessment had a positive and statistically significant effect, risk response had a negative and statistically significant effect, while risk monitoring had a positive and statistically significant effect. The study concludes that risk identification, risk assessment, and risk monitoring practices strengthened financial sustainability among licensed water and sewerage companies in Kiambu County, while risk response practices weakened sustainability outcomes. The study recommends strengthening structured identification, assessment, and monitoring systems while aligning response strategies with institutional capacity. Ethical principles including informed consent, confidentiality, and voluntary participation were observed throughout the study.
