| dc.description.abstract | In Kenya’s financial landscape SACCOSs play a critical role of financial intermediation.
They mostly focus on personal development, small and micro enterprise sector of the
economy. SACCOSs are member owned financial institutions that offer savings and
credit to members. They accept monthly payments for shares from members which form
a pool of funds to serve the credit needs of members. SACCOSs represent a considerable
part of the financial sector in respect to access to credit, savings mobilization and wealth
creation. The objective of the study was to establish the relationship between financial
performance and size of SACCOSs in Kenya. The aim of the study was to establish
whether the size of the SACCOs as measured by total assets, deposits and turnover has an
effect on the financial performance as measured by the return on asset ratio.
The study adopted a descriptive survey design and the population of study was all the
deposit taking SACCOSs in Kenya licensed by SASRA as at December 2012.The
population consisted of 124 SACCOSs and stratified sampling method was used to pick a
sample of 30 SACCOSs. The sample consisted of all the three categories of SACCOSs
namely, large, medium and small based on the value of the assets. The study used
secondary data collected from SASRA offices. The data was extracted from the audited
financial statements of the SACCOSs and the period of study was from 2009 to 2012.
Regression model and correlation analysis was used to establish the relationship and
ANOVA statistic was used to test the significance of the model.
The study concluded that there was a strong relationship between financial performance
and size of SACCOS in Kenya as explained by adjusted R2 of 0.895% implying that total
assets, savings/deposits and turnover contributed 89.5 % of the variation in return on
assets. The probability value of 0.005a was obtained implying that the regression model
was significant in predicting the relationship between return on assets and the predictor
variables as it was less than α=0.05. The study established that savings/deposits played a
key role in determining the financial performance of SACCOSs. This study therefore
recommends that the management of SACCOSs should devise strategies of increasing
savings/deposits. This could be achieved by recruiting more members into the SACCOSs.
Members’ contributions form the savings/deposit in the SACCOSs which are used to
extend loans to members and at the same time members provide ready market for the
loans. Loans constitute the highest percentage of the total assets in the SACCOSs and
assets are used to generate future revenues. | en |
