Technoloological innovation and competitive advantage of Deposit taking savings and Credit Cooperative Societies in Nairobi City County.

Abstract

The objective of the study was to determine the effect of technological innovation on competitive advantage among DT SACCOs in Nairobi City County. The adoption of technological innovation by the deposit-taking Sacco’s was proxies by the capacity of the organizations to avail ATM access, mobile banking, member portal, telebanking, and money transfer services. A descriptive research design was used on a population of 41 deposit-taking Sacco organizations. The data collection method used was a questionnaire in which 37 were received back from the sample size of 41. From the analysis of the data collected, the technological innovation adopted by the organizations was manifested by a large extent by agency services, money transfer services access by customers of their funds through the ATM, and to a moderate extent adoption of telebanking services. The results likewise suggested that the adoption of technological innovation had resulted in an improved number of members, faster loan processing, and training of the Sacco products by members. From the part of the influence of the adoption of technological innovation on the competitive position of the company, it was found that the Sacco has had registered reduced operation cost, visibility of the organization products and improved loan application turnover and thus profitability of the organization. Study findings established that the correlation between technological innovation and competitiveness is strong (r=0.799) and that one unit change in the Sacco technological innovation resulted in an improved competitiveness level by 0.875. Because of the findings, the researchers concluded that technological innovation had a positive and significant effect on the competitiveness of the Sacco’s and therefore the study recommends the adoption of different forms of technological innovation that is tailored to the nature of operations of the organization.