CORPORATE GROWTH STRATEGIES AND FINANCIAL PERFORMANCE OF DEPOSIT-TAKING SAVINGS AND CREDIT CO-OPERATIVE SOCIETIES IN NAIROBI CITY COUNTY, KENYA
CORPORATE GROWTH STRATEGIES AND FINANCIAL PERFORMANCE OF DEPOSIT-TAKING SAVINGS AND CREDIT CO-OPERATIVE SOCIETIES IN NAIROBI CITY COUNTY, KENYA
Elijah Gitahi Ndung’u - Master of Business Administration Student (Strategic Management Option), Kenyatta University, Kenya
Dr. John Mutinda - Lecturer, Department of Business Administration, Kenyatta University, Kenya
ABSTRACT
In today's complex global world, corporate governance has become a significant factor in monitoring partnerships. SACCO has gradually become a basic part of economic and social events. SACCO has the ability and freedom to contact customers in areas that are not attractive to banks. Millions of people across Kenya have been able to access formal financial services from saving and credit cooperative societies. Nevertheless, the demand for the service continues to exceed the supply significantly due to the myriad of potential clients who have remained unattended. The survey aimed to explore the impact of corporate growth strategies on the financial performance of deposit-taking SACCOS in Nairobi City County, Kenya. The survey specifically sought to determine the effect of; managerial capabilities, technology innovation, market penetration and capital adequacy on their financial performance. The survey was guided by the resource-based view theory, agency theory and stakeholder theory. This study adopted a descriptive research design. The survey target 102 respondents from 34 registered and active deposit SACCOs in Nairobi County. The study used census sampling techniques to intentionally select executive directors, marketing managers, and members of the SACCO executive committee to form a sample size of 102 respondents. The questionnaires were utilized to gather data. The pre-test was done to enhance the validity and reliability of research tools. The collected data was analyzed descriptively and inferentially. The analyzed data was displayed by frequency tables, bar charts and pie charts. The results established that coefficient of correlation R was 0.918 an indication of strong correlation with the variables. The findings also established that coefficient of adjusted R2 was 0.843 which translates to 84.3%. This explains that 84.3% changes of financial performance of SACCOs can be explained the following variables; managerial capabilities, technology innovation, market penetration and capital adequacy. The findings also revealed that there is a significant relationship between corporate governance practices (managerial capabilities, technology innovation, market penetration and capital adequacy) and financial performance of deposit-taking SACCOs since P-value is less than 0.05. The study concluded that corporate governance practices affect the financial performance of deposit-taking SACCOs. The deposit-taking -SACCOs should always employ competence staff and there should be continuous training need assessment among employees so as to improve their skills. The SACCO should also ensure that all employees are well trained about the policies governing the SACCOs to enlighten the employees on their knowledge about SACCO and their profitability. Deposit-taking -SACCOS should continuously train their members to the concept of saving for prosperity so as to create SACCO members’ ownership.
