Factors influencing performance of savings and credit cooperative societies in Kenya: a case of cooperative societies in Bungoma County

Abstract

Co-operatives have long been recognized to play important roles in Societies that translates into the improvement of living conditions of their members. Being voluntary, democratic and self –controlled business associations, cooperatives offer institutional framework through which local Communities gain control over the productive activities from which they derive their livelihoods. Savings and Credit Cooperative Societies (SACCOs) in Kenya have been investing their funds with objectives of maximizing their wealth. Studies have shown that lack of sustained growth of SACCOs‟ wealth has made it hard for them to absorb operational losses, which has threatened their sustainability. This failure to build enough SACCOs wealth, through accumulation of institutional capital was attributed to lack of corporate governance, low member commitment, lack of motivation, failure to follow cooperative principles and lack of appropriate technology. The purpose of this study was to assess the factors that influence the performance of savings and credit cooperative societies in Bungoma County. To achieve this objective, the study employed a survey involving a sample of 6 SACCOS in Bungoma County using a questionnaire and document review tools and was analyzed using both descriptive and inferential statistics. Correlation analysis was used to test the relationship between the independent variables and the dependent variable while regression analysis was used to determine the contribution of each independent variable to the dependent variable. Primary data was collected by structured questionnaires from Chief Executive Officers (CEOs) of these SACCOs owing to their Pivotal Positions in the Sacco.