| dc.description.abstract | The Kenyan Unit Trust Funds play an integral role in economic development therefore its
financial performance becomes a very critical indicator of investment efficiency and
market stability in Kenya. The emergence of financial technology (FinTech) has
revolutionized the global financial landscape by enhancing efficiency, inclusivity, and
accessibility. However, its effect unit trust funds in Kenya remains underexplored and
insufficiently documented and understood. This study was motivated by the increasing
digital transformation and the need to understand how FinTech applications and fund size
interact to jointly influence fund performance within Kenyan Unit Trust Funds. The study
examined the effect of Fintech integration on financial performance of unit trust funds,
focusing on the moderating role of fund size. Four FinTech constructs; digital payments,
digital deposits, digital portfolio management, and digital risk management were used as
predictors of performance. Theoretically, the study was grounded on the Technology
Acceptance Model, Financial Intermediation Theory, Profit Maximization Theory, and
the Capital Asset Pricing Model. Mixed-methods design of descriptive and panel designs
was employed, integrating primary data from fund managers with secondary data from
audited reports of licensed UTFs. Primary data were collected through questionnaires
administered to fund managers, while secondary data were extracted from audited fund
reports and regulatory filings. Analysis was conducted using SPSS for descriptive
statistics and STATA for panel estimations, with Return on Assets (ROA) as the main
performance indicator. The estimation model passed key diagnostic tests for normality,
multicollinearity, stationarity, autocorrelation, and heteroskedasticity model fit test.
Hypotheses were tested a 5% significance level, Findings revealed that FinTech
significantly
enhances
data
fund
performance
of
UTFs.
Primary
data:
Y=0.053+0.279X1+0.220X2+0.287X3+0.230X4, with all p-values <0.05. at 95% CI while
secondary
�
� =−4.01971+0.040847𝑋1 +0.018446𝑋2 +0.16416𝑋3 +
0.051229𝑋4 with all P-values < 0.05 at 95% CI. Fund size significantly moderated the
relationship between digital portfolio management and fund performance, indicating that
larger funds derive greater benefits from FinTech use in business models and strategies.
The study concludes that fintech adoption improves operational efficiency, portfolio
optimization and risk control. The study extends the Technology Acceptance Model
(TAM) to an institutional investment context, offering new insights into technology
performance dynamics within fund management. Practically, it guides fund managers on
leveraging FinTech tools for enhanced operational efficiency and performance, while
providing regulators with evidence to design policies that support digital transformation
in the capital market. The Government of Kenya draws insights on enhancing digital blue
print agenda, vision 2030 and financial inclusivity.
Keywords: Financial technology, fund size, financial performance and Unit Trust Funds. | en_US |
