| dc.description.abstract | The financial system plays a critical role in the economy. It enables the financial intermediation process which facilitates the flow of funds between savers and borrowers, thus ensuring that financial resources are allocated efficiently towards promoting economic growth and development. Financial stability describes the condition where the financial intermediation process functions smoothly and there is confidence in the operation of key financial institutions and markets within the economy. The set of financial soundness indicators developed by SASRA and WOCCU including liquidity, asset quality and capital adequacy are some of the main factors affecting the financial performance of a company. The study sought to establish the effect of financial stability on performance of deposit taking SACCOs in Nairobi County. The study used descriptive research design to examine the determinants of financial performance of Savings and Credit Co-operative Societies in Nairobi County. The population of this study comprised all the 34 DTS which have complied with SASRA regulations by December 2013. The study used secondary data from all the SACCOs sampled. The data was extracted from the audited financial statements for the year ended 31st December 2010 to 31st December 2013 and was considered sufficient for the study. The data collected was analyzed in order to determine the relationship between financial performance and financial stability. The coefficient of determination (R2) was used to measure the extent to which the variation in financial performance is explained by the variations in its determinants. This analysis was done using SPSS software and the findings presented in form of a research report. From the regression model, the study found out that there were factors positively influence the financial performance of Deposit taking Saccos in Nairobi County, including liquidity, capital adequacy, size of the SACCO and management quality. They influenced it positively. The study found out that the intercept was 2.481for all years. The four independent variables that were studied (liquidity, capital adequacy, size of the SACCO, management quality) explain a substantial 71.5% of financial performance of Deposit taking Saccos in Nairobi County as represented by adjusted 𝑹𝟐 (0.715). The study therefore concludes that financial stability positively and significantly influences the financial performance of deposit taking SACCOS in Nairobi County. The study recommends that all SACCOs should embrace the prudential financial management standards established by SASRA and WOCCU. | en_US |
