Effect of liquidity management on financial perfomance of commercial banks in mogadishu, somalia

Abstract

The purpose of the study was to conduct a survey of Liquidity management factors affecting in financial performance of the commercial banks in Mogadishu, Somalia. The study design was used is descriptive survey, the target population of the study was 112 employees of commercial banks in Mogadishu. A sample size of 87 respondents was selected using Slog van’s formula. Data collection methods used included questionnaire. The selection sample technique was purposive or judgmental approach. Data was analyzed using SPSS version. The key findings were that liquidity management drivers individually had a positive influence on the financial performance of commercial banks in Mogadishu-Somalia. The overall results indicated that there was a significant linear relationship between account receivable management, account payable and cash management on financial performance of commercial banks in Mogadishu. The conclusions were based on the objectives of the study that liquidity management drivers had a significant influence on financial performance of commercial banks. The results established that liquidity management drivers were found to significantly and positively influence financial performance of commercial banks in Mogadishu, Somalia. The study results support the view that liquidity management drivers have a significant effect on financial performance. It is recommended that managers should study and select the driver that best suits their banks in order to achieve maximum performance.