LIQUIDITY RISK MANAGEMENT PRACTICES, AND PERFORMANCE OF REAL ESTATE CONSTRUCTION HOUSING PROJECTS IN KENYA; A CASE OF REAL ESTATE CONSTRUCTION HOUSING PROJECTS IN BUSIA COUNTY

Abstract

Objective: This study examined the extent to which liquidity risk management practices influence the performance of real estate construction housing projects in Busia County, Kenya. It aimed to assess how effective liquidity management contributes to project continuity, financial stability, and successful completion.   Theoretical Framework: The study was anchored on financial management theory and risk control theory. These frameworks provide a basis for understanding how liquidity risk management can mitigate project delays, cost overruns, and financial instability in the construction sector.   Method: A descriptive survey design was adopted. The target population included 1,832 stakeholders in real estate construction, from which a sample of 298 was selected through stratified and simple random sampling techniques. Data collection tools included structured questionnaires, interview schedules, checklists, and focus group discussions. Quantitative data were analyzed using descriptive statistics, Pearson correlation, and simple linear regression in SPSS version 25. Qualitative data were analyzed thematically.   Results and Discussion: The study tested the null hypothesis that there is no significant relationship between liquidity risk management practices and project performance at a 0.025 level of significance. The hypothesis was rejected (p = 0.000), indicating a statistically significant positive relationship. Effective liquidity planning enhanced financial flow, minimized delays, and improved project outcomes, confirming theoretical expectations.   Research Implications: The study offers insights for developers, managers, and policymakers on the need to institutionalize strong liquidity risk frameworks to ensure project sustainability.   Originality/Value: This study contributes original empirical evidence from a developing economy, addressing gaps in construction finance literature and supporting strategic decision-making in real estate development.