Michael Mutua Kiswili, Mike Iravo Amuhaya, Ismail Noor, Senelwa Anaya


Cooperatives significantly impact on growth and development of the Kenyan economy. However, they are characterized by poor performance in terms of total assets, membership and non-performing loans, leading to collapse, closure and restriction. Despite having financial resource SACCOs in Kenya are still experiencing poor performance in terms of returns on investments, customer satisfaction and efficiency in service delivery. The objective of this study was to assess how financial resource affects the performance of deposit taking Savings and Credit Cooperative Societies in Kenya. This study used a descriptive explanatory research design and pragmatic research paradigm. The target population was heads of finance, human resource, information and communication technology and chief accountants in the selected 84 deposit taking SACCOs in five Counties in Kenya. The study used purposive sampling and stratified random sampling method to select 184 managers from the population. Semi structured questionnaire was employed to collect primary data while secondary data for the study was collected using data extraction tools. Quantitative data analysis was done with the assistance of inferential and descriptive statistics. Statistical Package for Social Sciences (SPSS version 22) also helped in the analysis. Descriptive statistics included percentages, frequency distribution, mean, and standard deviation. Pearson correlation coefficient and univariate regression analysis were employed for analysis of inferential data. This study found that financial resource has positive and significant effect on the performance of deposit taking SACCOs in Kenya. In addition, the indicators of financial resource such as source of funds, adequacy of funds and timely release of funds affect deposit taking SACCOsâ performance in Kenya. The study recommends that the government should consider reviewing SASRA regulations to make them more favorable to SACCOs in terms of membership requirements, capital requirements and liquidity requirements and in particular accounting for loan delinquency provisions where incomes of members follow cyclical patterns like in coffee and tea growing agricultural areas. In addition, the management of SACCOs should come up with ways of obtaining cheap loans from local and international investors so as to increase their loan portfolio and consequently their profitability. Also, the management of SACCOS should incentivetise their members and customers to increase their savings and deposits with them.

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