| dc.description.abstract | Financial innovation is the act of creating and then popularizing new financial
instruments as well as new financial technologies, institutions and markets. The ability to
provide a specified volume and quality of service with the lowest level of resources
capable of meeting that specification, performance measures and or indicators is required.
Most of the innovations that have occurred have been occasioned by new distribution
channel systems such as automatic teller machines (ATMs) and debit card technologies,
which have allowed banks to diversify the way in which customers transfer funds, pay
bills and buy goods and services without using cash or cheques. SACCOs today are
experiencing a reduction in their member numbers since established banking institutions
are taking the challenge by investing in faster and more efficient systems that can satisfy
their customers’ needs. The objective of the study was to establish the effect of financial
innovation on efficiency of SACCOs in Kenya. The research problem was studied by use
of a descriptive research design. The population consisted of the 130 SACCOs licensed
by Sacco Societies Regulatory Authority (SASRA) as at 31st of December 2013.
Secondary data was used in this study. The data collected was analyzed in order to
determine the relationship between efficiency and determinants of efficiency. the study
concluded that management quality, size, credit risk and capital had varying degrees of
impact on the efficiency of SACCOs in Kenya in the period under study. This study
concludes that management quality and size influenced efficiency positively but the two
variables were statistically insignificant and thus their overall contribution was
negligible. This study recommends the adoption of innovation strategies by the various
SACCOs operating in Kenya so as to enhance efficiency in operations, boost profitability
and attract more public attention. SACCOs need to invest more capital so as to guarantee
the going concern aspect and thus win the confidence of potential clients. This study
recommends that all SACCOs should highly embrace research and development to
foresee new and innovative ideas to boost efficiency in internal operations, increase
customer base and subsequently increase profitability. | en_US |
