| dc.description.abstract | Financial performance is a subjective measure of how well a firm can use assets from its
primary mode of business and generate revenues. In recent times Sacco’s are facing cut
throat competition stemming from the new players that have entered the market for
financial services. This study therefore gives a clear insight on the financial benefits
enjoyed by Saccos in the event they adopt various financial innovations and the entire
benefits accrued in terms of the organisational profitability and sustainability. These
financial innovations bring about an efficient customer services system and reduction in
operational costs. The objectives of the study were to establish the relationship between
financial innovation and financial performance of Deposit taking SACCOs in Nairobi
County. The population of interest was all the 44 deposit taking Sacco’s in Nairobi
County. Secondary data on performance was sourced from the Sacco’s annual financial
reports and Sacco Societies Regulatory Authority (SASRA) supervisory reports. The data
covered the period 2008 to 2012. Data analysis involved reducing accumulated data to
manageable levels, developing summaries, looking for patterns and applying statistical
techniques.
This Study established that Saccos have started embracing the use of money transfer
services such as M-pesa, Zap, Orange Money and Yu cash, but they were yet to link them
with their back office financial databases. The study also established that Saccos were
slowly adopting internet banking. This has brought about the usage of information
technology, Internet, ICT infrastructure, websites, and computer technology, in addition
to Internet connectivity technology. This study therefore recommended that SACCO
must keep abreast with new trends in the financial market. Such areas include ATMs and
other technology driven products. The management of these Saccos should approve the
ICT budgets to acquire new software to fully automate its operations which will then
form a platform from where new products will be served. | en |
