200 research outputs found

    The Impact of Core Capital and membership growth on financial performance of Deposit Taking SACCOS.

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    Savings and Credit cooperatives commonly known as   Saccos’ are financial organizations formed by members with the same common bond to mobilize savings and later grant loans to the willing members. Prior to 2008 regulatory reforms which became operational in 2011, there was no conscious effort to regulate the subsector prudently because the organizations were not thought to pose any significant risk to the country’s financial system. However, the organizations expanded financially and started Front office services activity (FOSA - banking like services) in attempt to increase efficiency in services delivery to the members. In 2008, the government and the Sacco stakeholders formulated and legislated Sacco Societies Act 2008 and subsidiary deposit taking Sacco regulations of 2010. The null hypotheses sought to examine if Core Capital requirements and members retention had any significant impact on the deposit taking   Saccos’ financial incomes. The relevant literature was reviewed to ascertain the knowledge gap left by earlier scholars. The methodology of data collection was mining secondary data from Sasra data base and administration of questionnaires to various CEOs and chief finance manager who were knowledgeable on the subject. The data was the analysed using the statistical package for social sciences (SPSS) which either led to acceptance or rejection of null hypothesis. The study used census Survey design and a linear regression model to establish the influence of core capital and membership retention Sacco’s financial Position. It compared the Betas of various independent and dependent variables before the regulatory reforms and after. The study conclusions on the basis of findings revealed that core capital and membership growth have positive impact on Sacco’s financial performance

    Challenges Facing Deposit Taking Savings and Credit Co-Operatives’ Compliance with the Sacco Societies’ Act Number 14 (2008) in Nyeri County

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    The study sought to investigate the challenges facing deposit taking savings and credit co-operatives’ in compliance with the Sacco societies’ Act number 14 (2008) in Nyeri County. The study was guided by the following specific objectives: to assess the extent to which capital adequacy affects Savings and credit co-operatives’ compliance to the Sacco societies’ Act number 14 of 2008 in Nyeri county; to evaluate the extent to which governance affects Savings and credit co-operatives’ compliance to the Sacco societies’ Act number 14 of 2008 in Nyeri county; to investigate the extent to which information technology capacity affects Savings and credit co-operatives’ compliance to the Sacco societies’ Act number 14 of 2008 in Nyeri county; and to assess the extent to which size of the Savings and credit co-operatives affect Saccos’ compliance to the societies’ Act number 14 of 2008 in Nyeri county. to assess the compliance level to Sacco societies’ Act number 14 (2008) by the Deposit Taking Savings and Credit Co-operatives; to evaluate operational environmental factors that affects compliance with the Sacco societies Act number 14 (2008) by the Deposit Taking Savings and Credit Co-operatives; to investigate internal business environmental factors that affects compliance with the Sacco societies Act number 14 (2008) by the Deposit Taking Savings and Credit Co-operatives. The study adopted descriptive survey research design where the target population was the management of the Savings and Credit Co-operatives consisting of 120 individuals since the population is small a census was carried. Statistical inferences (Regression analysis) were used to measure relationships while thematic analysis was used to interpret and organize the qualitative data. The findings include that ICT capacity of the SACCOS in Nyeri County is inadequate; The SACCOs in the county have not attained the required capital ratio and 80% of the SACCOs have not fully complied with the Societies’ Act of 2004.The researcher’s conclusion and recommendations was that ICT capacity, capital adequacy, size and governance were found to be important as far as compliance with the Societies’ Act number 14(2008). These factors present challenges that hinder SACCOs from compliance. Therefore Sacco societies Act should be reviewed to ensure as many SACCOs are able to comply with the Act as possible in order to ensure that members deposits held in the current outfits are protected as the small and emerging Saccos endeavour to overcome the compliance challenges. The revision may be informed by the fact that almost all the entities have not been able to comply with the high legal threshold .Further; there is also need to take into deeper consideration the historical background of the Sacco movement in Kenya and the place in financial intermediation purposes. Saccos being member based organizations and being formed to fill the existing financial service gaps that other financial institutions may not be willing to offer to the low and middle income groups need not be put on high legal standards as conventional commercial banks in order to bring as many people as possible to the financial market that is ideal for economic growth. Keywords: Savings and Credit Cooperative Societies, Compliance, Front Office Savings Activities, SACCO Societies’ Regulatory Authorit

    Determinants of Technical Inefficiency of Saccos in Kenya: A Net Operating Cash Flows Output Slack Analysis

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    Purpose: The purpose of this study was to evaluate the determinants of technical inefficiency of Saccos in Kenya. Methodology: The explanatory research design was utilized. The financial statements data was collected from a census of 46 audited deposit taking Saccos and methods used included estimation of technical inefficiency by employing a non-parametric DEA method while the second step concerned determination of inefficiency using parametric SFA. The log truncated panel data was used for a period of 8 years (2007-2014). Result: All the predictors jointly influence inefficiency and are significant except for prime regressors given NOCF slack as hypothesized in agency, efficiency and intermediation theories. NOCF slack regression reflects lack of managerial influence as indicated by Gamma (1.13E-23) while DEA result of all Saccos indicated 0.976 mean efficiency. Contribution to policy and practice: The NPTA, CA and FI predictors had significant influence on pure technical inefficiency, thus apt for decision making

    Challenges Facing Deposit Taking Savings and Credit Co-Operatives’ Compliance with the SACCO Societies’ Act Number 14 (2008) in Nyeri County, Kenya

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    The study sought to investigate the challenges facing deposit taking savings and credit co-operatives’ in compliance with the Sacco societies’ Act number 14 (2008) in Nyeri County. The study was guided by the following specific objectives: to assess the extent to which capital adequacy affects Savings and credit co-operatives’ compliance to the Sacco societies’ Act number 14 of 2008 in Nyeri county; to evaluate the extent to which governance affects Savings and credit co-operatives’ compliance to the Sacco societies’ Act number 14 of 2008 in Nyeri county; to investigate the extent to which information technology capacity affects Savings and credit co-operatives’ compliance to the Sacco societies’ Act number 14 of 2008 in Nyeri county; and to assess the extent to which size of the Savings and credit co-operatives affect Saccos’ compliance to the societies’ Act number 14 of 2008 in Nyeri county. to assess the compliance level to Sacco societies’ Act number 14 (2008) by the Deposit Taking Savings and Credit Co-operatives; to evaluate operational environmental factors that affects compliance with the Sacco societies Act number 14 (2008) by the Deposit Taking Savings and Credit Co-operatives; to investigate internal business environmental factors that affects compliance with the Sacco societies Act number 14 (2008) by the Deposit Taking Savings and Credit Co-operatives. The study adopted descriptive survey research design where the target population was the management of the Savings and Credit Co-operatives consisting of 120 individuals since the population is small a census was carried. Statistical inferences (Regression analysis) were used to measure relationships while thematic analysis was used to interpret and organize the qualitative data. The findings include that ICT capacity of the SACCOS in Nyeri County is inadequate; The SACCOs in the county have not attained the required capital ratio and 80% of the SACCOs have not fully complied with the Societies’ Act of 2004.The researcher’s conclusion and recommendations was that ICT capacity, capital adequacy, size and governance were found to be important as far as compliance with the Societies’ Act number 14(2008). These factors present challenges that hinder SACCOs from compliance. Therefore Sacco societies Act should be reviewed to ensure as many SACCOs are able to comply with the Act as possible in order to ensure that members deposits held in the current outfits are protected as the small and emerging Saccos endeavour to overcome the compliance challenges. The revision may be informed by the fact that almost all the entities have not been able to comply with the high legal threshold .Further; there is also need to take into deeper consideration the historical background of the Sacco movement in Kenya and the place in financial intermediation purposes. Saccos being member based organizations and being formed to fill the existing financial service gaps that other financial institutions may not be willing to offer to the low and middle income groups need not be put on high legal standards as conventional commercial banks in order to bring as many people as possible to the financial market that is ideal for economic growth. Keywords: Savings and Credit Cooperative Societies, Compliance, Front Office Savings Activities, SACCO Societies’ Regulatory Authorit

    Effect of liquidity risk on the financial performance of deposit taking savings and credit cooperative organisations (SACCOs) in Kenya

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    Liquidity risk is the potential that an entity will be unable to acquire the cash required to meet its short and intermediate-term obligations. Deposit-taking Savings and Credit Cooperative Organisation (SACCOs) face liquidity risk when they are unable to fund their operations and lending requirements to their members as and when circumstances demand. Given that liquidity is a key phenomenon on the optimal functioning and financial performance of deposit-taking SACCOs, this study critically analyzed the effect of liquidity risk on the financial performance of DT SACCOs in Kenya. The study used a descriptive survey design and employed regression methods to model the relationship between liquidity risk and financial performance of DT SACCOs. The data were analyzed at a 5% level of significance. The study findings revealed that at a 5% level of significance, liquidity risk had a statistically significant influence on the financial performance of deposit-taking SACCOs. Basing on the findings, DT SACCOs are encouraged to focus on enhancing the mobilization of deposits to ensure that an asset portfolio that minimizes liquidity risk is maintained

    The Impact of Credit Management and Liquidity on financial performance of Deposit Taking SACCOS.

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    Savings and credit cooperative Societies (SACCOS) have granted loans over the years without concentrating on the quality of loans in their portfolios and hence maintained key assets in their books that would not be accounted for. Similarly they have provided cash to clients without any purposive determination of cash levels. The study therefore sought to ascertain if liquidity and credit management played important roles in determination of revenues of deposit taking SACCOS in Kenya. To ascertain factually if the two variables had any role, the study chose to examine the coefficients of Beta before statutory management which was implemented in 2010 and the coefficients of Betas after 2010. The vigorous processes of research exercise were undertaken with findings, conclusions and recommendations being made on the basis of analytical manipulation of data.The study findings were that liquidity and credit management had great impact on SACCOS financial performance especially if managed prudently and strengthened by the legal framework as a moderating variable. The study recommends that SACCOS should continuously formulate proper loan products and maintain adequate cash balances for profitability and financial stability of the sacco. They should also develop key policies on staff recruitment and retention, liquidity and loan provisioning to enable SACCOS increase financial performance. This study will empower SACCOS with Knowledge on prudential credit and liquidity management that will guarantee sustainability and profitability while using own resources.

    The role of liquidity risk in augmenting firm value: lessons from savings and credit cooperatives in Kenya

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    Purpose: The study aimed to examine the interaction between liquidity risk and the firm's value among Kenyan SACCOs. Research methodology: This study adopted the positivism research philosophy and utilised both descriptive and causal research designs. The study targeted all the 164 licenced SACCOs in Kenya. A sample made up of 115 respondents was selected using a stratified random sampling method. The study utilized secondary data obtained from organization’s published financial statements. Analysis of data was done using descriptive statistics and inferential analysis. Results: The study results illustrated that value of the firm was positively correlated with liquidity risk which significantly and favourably impacted the firm value; (β=0.014577, P=0.001). Limitations: The analysis and conclusions reached in this study were limited to data gathered for the five-year duration between 2012 and 2016. Contribution: This study is useful to the management of SACCOs and the Kenyan government to understand better how financial risk management can improve their firms' value. The study adds to the existing knowledge of financial risk management and firm value. Keywords: Savings and credit cooperatives, Liquidity risk, Firm valu

    The role of liquidity risk in augmenting firm value: lessons from savings and credit cooperatives in Kenya

    Get PDF
    Purpose: The study aimed to examine the interaction between liquidity risk and the firm's value among Kenyan SACCOs. Research methodology: This study adopted the positivism research philosophy and utilised both descriptive and causal research designs. The study targeted all the 164 licenced SACCOs in Kenya. A sample made up of 115 respondents was selected using a stratified random sampling method. The study utilized secondary data obtained from organization’s published financial statements. Analysis of data was done using descriptive statistics and inferential analysis. Results: The study results illustrated that value of the firm was positively correlated with liquidity risk which significantly and favourably impacted the firm value; (β=0.014577, P=0.001). Limitations: The analysis and conclusions reached in this study were limited to data gathered for the five-year duration between 2012 and 2016. Contribution: This study is useful to the management of SACCOs and the Kenyan government to understand better how financial risk management can improve their firms' value. The study adds to the existing knowledge of financial risk management and firm value. Keywords: Savings and credit cooperatives, Liquidity risk, Firm valu

    Determinants of Technical Inefficiency of Saccos in Kenya: Total Revenue Output Slack Analysis

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    This study assessed the determinants of technical inefficiency of Saccos in Kenya. The explanatory research design was applied. The certified annual reports information was collected from a census total of 46 deposit taking Saccos and methods used in estimation of technical inefficiency were both non-parametric DEA and parametric SFA. The log truncated panel data covered a period of 8 years (2007-2014). The result indicates insignificant influence of all predictor variables on inefficiency given total revenue output (TR) slack as hypothesized in agency, x-inefficiency and intermediation theories. TR slack regression reflects a significant managerial influence as indicated by Gamma (0.999956). However, DEA result of all Saccos showed 0.024 mean inefficiency. The TR slack is key in identifying managerial inefficiency, thus apt for decision making while the relationship between earnings management and the insignificance of predictors given TR slack, should be explored in the future studies. Keywords: Saccos in Kenya, Technical Inefficiency, Total Revenue Output Slack. DOI: 10.7176/RJFA/11-8-05 Publication date: April 30th 2020

    Factors Influencing the Financial Performances of Saving and Credit Cooperative Societies in Case of Derash and Alle Woreda in SNNPRG, Ethiopia

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    The study aims to identify factors influencing financial performance of savings and credit cooperative societies of the study area. To achieve the “general and specific objectives” the study was look factors influencing the financial performance of SACCOS. This study also used descriptive research design and quantitative research approach were used and the primary sources of data were collected from 220 staff members of SACCOS from Derash and Alle Woreda Southern Region. The sampling techniques were stratified sampling method. For data analysis, descriptive statistics including mean, std. deviation, frequency and percentages were used. The results of the study indicated loan repayment, interest rates, membership enrolment, and duration of loan processing, management of loan defaulters were identified as factors influencing the financial performance of savings and credit cooperative societies. In general to increasing the financial performance it suggests that SACCOs in the region should strengthen its applicant screening criteria and due diligence assessment to select potential risk taking applicants and adopt appropriate pre and post credit risk assessments. Besides, the SACCOs needs to make sure that borrowed funds are being used for the intended purpose through enhanced credit monitoring Keywords: SACCOS, Financial performance, Loan repayment, loan defaulters DOI: 10.7176/EJBM/12-16-04 Publication date:June 30th 2020
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