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Mumbe Matei - Masters Student, Department of Accounting & Finance, School of Business, Kenyatta University, Kenya

Dr. Salome Musau (PhD) - Lecturer, Department of Accounting & Finance, School of Business, Kenyatta University, Kenya


The research assessed the effects of Non-remittance of SACCO deductions and financial performance of Mentor deposit taking SACCO in Murang`a County, Kenya. Savings and credit cooperatives are organizations created by members to pool resources for economic growth and offer her members manageable loans and reward them with dividends on their deposits. Since the loanable funds are members’ contribution, the SACCO's operation may be impacted by the non-remittance of the monthly contributions. Determining the impact of non-withdrawal deposits, loan repayment, interest revenue, share capital, and the risk premium on the financial performance of the SACCOs was the study's specific goal. Institutional theory, credit risk theory, cash flow management theory and loan pricing theory support research variables since they show how each variable behaves. The study adopted the descriptive research design which was suitable in making a conclusion of the collected data of the three branches of Mentor SACCO, in Murang'a County. Systematic sampling design was used to create a sample size of 391 members and three branch credit officers where data collection was done using both open and enclosed questionnaires, and only 89% of questionnaires were completed and compiled for analysis, and a document review guide was used in collecting secondary data on financial performance from the audited financial statement provided by the SACCO chief executive officer. To test the validity, the Cronbach’s Alpha test was carried out on 10% of the sample; the results showed 0.9 an indication that, the tools were excellent for data collection and Valid at a P<5% showing a significance level for the test of validity and Pearson correlation. The financial ratios, Pearson correlation, and correlation of coefficient were used to determine the performance and also the relationship between independent and dependent variables. Statistically, it was noted that non-remittance of loans had a negative impact on the financial performance shown by a 25% of loans were not remitted in time thus the SACCO did not attain efficiency ratio of 100% as required by SASRA, and in the last five years the SACCO had not attained a current ratio of 2:1 as recommended, and asset growth affected the liquidity of the SACCO. The study recommends that the SACCO finds a safer means of remittance, vetting employers, and CRB should be used to minimize default. The data was presented in tables and figures. Since the information provided would not be shared with a third party, the respondents were offered the assurance of anonymity and secrecy.

Full Length Research (PDF Format)