Leverage and Quality of Voluntary Disclosure among Commercial Banks in Kenya


  • Kimaru Thairu Kenyatta University
  • Ambrose Jagongo Kenyatta University
  • Lucy Wamugo Kenyatta University




Different results have been reported by the existing studies with regards to leverage and quality of voluntary disclosure. Therefore, this research sought to establish the effect of firm leverage on the quality of voluntary disclosure among commercial banks in Kenya. The study was guided by signalling theory. This study adopted positivistic philosophy and explanatory research design. The study period was between the years 2013- 2020 and 38 out of 41 commercial banks in Kenya licensed by the Central Bank of Kenya as at 2020 were selected as the sample using purposive sampling method. The data was extracted and compiled for evaluation from the financial statements using the document review guide. Descriptive and inferential statistics evaluated the data. Pearson correlation analysis was done to show correlation between variables. A panel regression model was used. The study found that leverage has a negative significant influence on quality of voluntary disclosure of commercial banks. The study recommends that banks manage their debt levels carefully to enhance transparency and the quality of their voluntary disclosures. Given that debt holders often access information through alternative channels such as credit ratings, banks should diversify their communication strategies beyond annual reports to include more frequent and detailed disclosures.

Keywords: Leverage, Quality of Voluntary Disclosure & Commercial Banks

Author Biographies

Kimaru Thairu, Kenyatta University

Ph.D Candidate, Kenyatta University

Ambrose Jagongo , Kenyatta University

Department of Finance and Accounting, School of Business, Economics & Tourism, Kenyatta University

Lucy Wamugo, Kenyatta University

Department of Finance and Accounting, School of Business, Economics & Tourism, Kenyatta University


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How to Cite

Thairu, K., Jagongo, A., & Wamugo, L. (2023). Leverage and Quality of Voluntary Disclosure among Commercial Banks in Kenya. Journal of Finance and Accounting, 7(11), 106–117. https://doi.org/10.53819/81018102t2276