Abstract:
Sustainability of water and sanitation services is categorized as a global problem.
Water and sanitation is number six of the worlds’ seventeen sustainable development
goals and an enabler to the achievement of all the other SDGs. Watsan sustainability
involves improved access, acceptable water quality against growing demand. Access
to watsan is a primary challenge globally due to its multifaceted use. Africa has the
lowest freshwater resources (9%), while America has the highest (45%) at the global
level. Asia follows (28%) and Europe (15.5%) in that order (Mugagga, 2016). Water
scarcity exacerbated by climate change and increased demand will cost an estimated
6% of the GPD by 2050 due to impacts on agriculture, health and employment. Kenya
with an estimated population of 53 million people has been classified as a water scarce
country. Approximately 53% of the Kenyan population lack access to safe water while
77% have no access to improved sanitation thus making watsan access a national
problem. Government spending on water development has significantly reduced
from approximately Kshs46b in 2021 to Kshs.45b in 2022. The achievement of
sustainability in the watsan, financing of up to 5 times the present level is needed.
WASCOs continue registering high water loss annually resting at Kshs.11.2b in 2022.
These statistics makes sustainability of water and sanitation in Kenya a national
problem. Empirical studies shows that effective financial management practices
contributes to firm sustainability. This study examined the influence of financing
practices on sustainability of WASCO in Kenya guided by the pecking order theory.
A positivism research philosophy was adopted with a descriptive research design.
A sample of 46 companies was purposely selected from the 91 licensed WASCOs in
Kenya. A likert scaled questionnaire was used to collect primary data. Secondary
data was obtained from the annual impact reports by WASREB. Reliability was
assessed using the Cronbach’s alpha coefficient while validity was assessed through
Kaiser-Meyer-Olkin test and Bartlett’s Chi-Square test of Sphericity. Diagnostic tests
included; normality, outliers, autocorrelation, multicollinearity and Gaussian
distribution using Q-Q plot, box plot, Durbin-Watson d statistics, Tolerance & VIF
statistics and Pearson’s correlation coefficient respectively. A bivariate linear model
was employed for inferential analysis. Results show the model explained
approximately 45.1% of WASCO sustainability. ANOVA show F-statistics of 36.080
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with a p-value of 0.000 indicating existence of a statistically significant influence of
financing practices on sustainability of WASCO. Beta coefficients results for financing
practices show β=27.834 and p-value of 0.000 which was significant. The study
recommends the strategic deployment of financing practices as they strongly influence
the sustainability of water and sanitation companies in Kenya.