IOSR Journal of Economics and Finance (IOSR-JEF) e-ISSN: 2321-5933, p-ISSN: 2321-5925. Volume 12, Issue 4 Ser. VI (Jul. –Aug. 2021), PP 33-41 www.iosrjournals.org DOI: 10.9790/5933-1204063341 www.iosrjournals.org 33 | Page Effect of Social Distancing Measures on the Financial Risk Management of Public Universities in Kenya Fredrick Oruko Otieno 1 , Benedict Alala 2 , Denis Bulla 3 , Jared G. O. O. Rading 4 , Umulkher Ali 5 , Deborah Muchilwa 6 1*2*3*4 (Department of Accounting and Finance, Masinde Muliro University of Science and Technology, Kenya) 5 (Department of Economics, Masinde Muliro University of Science and Technology, Kenya) 6 (Department of Business Administration and Management Sciences, Masinde Muliro University of Science and Technology, Kenya) Abstract: Background: Prior to the COVID-19 crisis, levels and trends of public universities operational costs were soaring while revenue streams were already considered insufficient to support their financial sustainability. With low level of operational revenue and additional pressures induced by the pandemic on all major sources of finance, public universities have struggle to finance their operation and responses to COVID-19. The main objective of this study was to examine effect of social distancing measures on the financial risk management of public universities in Kenya. Materials and Methods: The study followed an explanatory research design that examines relationships that trigger results. The target population was 62 staffs who were categorized into finance officer and DVC Finance and Planning from 31 public universities. The study was purposive in nature as all the respondents were considered hence a census study thus providing the relevant information necessary for the study. Structured questionnaires with closed-ended questions were utilized by the researcher. A pilot study was conducted to determine the research instruments' reliability and validity. The regression and correlation analyses were based on the association between two (or more) variables using Statistical Package for Social Scientists version 23. Analyzed data was organized into models and tables for easy reference Results: The findings indicated that social distance measures significantly accounted for 51.7% variation in financial risk management. Regression coefficient indicated that a unit increase in social distance measures would results to financial risk measures to significantly (P=0.000) increase by 0.636 units. Conclusion: The study concluded that Covid-19 prevention and mitigation measures significantly affect financial risk management of public universities in Kenya. The study recommended that public university management should regularly prepare cash flows statement to manage its liquidity and also viably include financial experts during formulation of risk management strategies and policies. Key Word: Corona Virus Disease of 2019, Financial Risk Management, Social Distancing. Public Universities --------------------------------------------------------------------------------------------------------------------------------------- Date of Submission: 07-08-2021 Date of Acceptance: 21-08-2021 --------------------------------------------------------------------------------------------------------------------------------------- I. Introduction Corona Virus Disease of 2019 (COVID-19) pandemic reveals how vulnerable enterprises are to global risk events and how constrained our usual business risk management methods are, but these precautionary steps continue to have negative economic impacts on companies and employees (Shafi, Liu, & Ren, 2020). The nation has seen job losses across several industries, and company wages and available working hours have decreased dramatically for workers. Unfortunately, in minimizing the market effects of COVID-19, even advanced methods have turned out to be fully ineffective. This is because a pandemic such as COVID-19 poses a systemic risk that needs systemic preparation and a systemic response. The COVID 19 pandemic has halted economic activity worldwide, hurting firms and pushing them toward bankruptcy and insolvency. Following WHO and CDC guidelines, various government worldwide instituted measures to mitigate and slow down spread of virus. Reduction in personalize contacts has significant effect on tourism, hospitality industry, educational sectors, banking and finance, transport industry and SMEs (Baum & Hai, 2020). In Kenya, suspension of education indefinitely initially caught most of the universities unaware and the public universities were affected most as indicated by delay in salaries, salary pay cut and delay in honoring other financial obligations. Egerton University and Kisii University issued circulars to staff informing them of an intention to reduce salaries by 40% as a result of the negative impact of the COVID-19 pandemic. Although Egerton and Kisii universities are currently in the spotlight over their inability to pay full contractual salaries as