SELECTED FACTORS INFLUENCING FINANCIAL PERFORMANCE OF SAVINGS AND CREDIT COOPERATIVE SOCIETIES IN KENYA: A SURVEY OF DEPOSIT TAKING SACCOs IN KERICHO COUNTY
MUTAI, FAITH CHEPKOECH
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Savings and Credit Cooperative Societies (SACCOs) play an essential role in economic development as part of the financial system. In Kenya, 63% of population benefit from SACCOs. SACCOs are vital instrument embraced by Kenyan Government towards increasing financial inclusion especially now that financial transactions are tending towards a cashless economy. Despite of its success it is faced with a number of challenges with the key being adoption of latest information technology and computerization. Therefore, the overall objective was to establish the factors influencing financial performance of deposit taking savings and credit cooperative societies in Kericho County. More specifically the study sought to determine the influence of information technology; loan repayment, interest rates charged by SACCO and competition from commercial banks on financial performance of Deposit Taking SACCOs in Kericho County. The key limitation of the study was that the respondents were reluctant in giving information fearing that the information they gave could be used to intimidate them or paint a negative image about them or their SACCOs. Descriptive research design was used in this study. The target population of this study was all the six deposit taking SACCOs in Kericho County consisting of 234 employees, from whom a sample of 75 employees was selected. Data collected was primary data. Reliability of the research instrument was calculated using Cronbach’s coefficient alpha of 0.7472. Data was collected using questionnaires and analyzed using both descriptive statistics and inferential statistics with the aid of Statistical Package for Social Scientists (SPSS). The correlation analysis revealed that all variables had a positive correlation relationship on the dependent variable. Multiple linear regression analysis results showed that information technology (β = 0.564), loan repayment (β= 0.218), interest rate charged by SACCO, (β = 0.095) and competition from commercial banks (β = 0.019) were all significant. Data was presented using tables and figures. The study concluded that all the variables of the study were important factors in financial performance of the SACCOs and needed to be addressed beginning with the most crucial which was in this case Information technology. It is recommended that SACCO managers should embrace and incorporate up-to-date information technology system in their efforts to gain competitive advantage over their other rivals in the market, impose strict measures on loan borrowers who fail to repay on due date and engage their employees when making changes in their system for smooth operations.