Factors Affecting the Financial Performance of Savings and Credit Co-Operative Society in Kenya: A Case of Mwalimu Savings and Credit Co-Operative Society

Although SACCOs has been present in Kenya since 1970s, this sector has not been able to impact positively on the lives of people. In light of this, the existence and flourishing of SACCOS in Kenya have not been able to perform well as compared to the other mainstream financial institutions like commercial banks. The most critical challenges facing Mwalimu SACCO Co-operatives are among others, lack of standardized accounting and prudential standards, lack of concessionary credit facilities previously given by Government with donor contributions, high capital cost brought about by liberalization of financial sector, high farm input cost as a result of liberalization of International trade and also liberalization of market players and decontrol of marketing of local commodities such as agricultural produce. As a result of these changes high competition has been experienced. This study sought to establish the factors affecting the financial performance of Sacco’s in Mwalimu National Sacco. The study sought to establish the role of competition, capital adequacy, corporate governance, and liquidity management and how they influence the performance Mwalimu National Sacco. The research study was studied through the use of a case study method. This method was preferred because it allowed for generalization of research findings. Target population was all employees in the performance Mwalimu National Sacco in Nairobi that was 200 drawn from various departments. The study used a stratified random sampling where 60 respondents were selected as the sample population. For this study, both qualitative and quantitative techniques were used. Pilot testing of the research instruments was conducted using staff working on a similar savings and credit co-operative society (SACCOS) who did not match my respondents. 10 questionnaires were administered to the pilot survey respondents who were chosen at random. Reliability of the questionnaire was evaluated through administration of the said instrument to the pilot group. The researcher used the most common internal consistency measure known as Cronbach’s alpha (α). The study used content validity to ascertain the validity of the questionnaires. Quantitative data was analyzed by descriptive analysis. Finally, data was presented in tables and graphs while the explanation to the same was presented in prose. In addition, the study also employed inferential statistics in the form of multiple regressions to establish factors that influence the performance of savings and credit co-operative society. The study revealed that that competition, capital adequacy, corporate governance and liquidity management are statistically significant in explaining performance of Mwalimu National SACCO in Kenya.