SASRA MODERATION EFFECT BETWEEN FIRM CHARACTERISTICS AND FIRM EFFICIENCY OF DEPOSIT TAKING SAVINGS AND CREDIT COOPERATIVES SOCIETIES IN KENYA
SASRA MODERATION EFFECT BETWEEN FIRM CHARACTERISTICS AND FIRM EFFICIENCY OF DEPOSIT TAKING SAVINGS AND CREDIT COOPERATIVES SOCIETIES IN KENYA
Raphael Njenga Gichinga - Student, Doctor of Philosophy, Accounting and Finance, Kenyatta University, Kenya
James Gatauwa - Lecturer, Department of Accounting and Finance, Kenyatta University, Kenya
Carolyne Kimutai - Lecturer, Department of Accounting and Finance, Kenyatta University, Kenya
ABSTRACT
The Sacco regulatory authority reports that members’ loans accounts 73.9 % of the industry total assets while share capital in these SACCOs depends on total deposits and the levy deposit rate. Empirical findings indicate that DTS have been inefficient with efficiency scores below one. Additionally, members of the SACCOs have been complaining of delay in loan disbursement contrasting to growing deposits levels. There lacks congruence on reviewed studies on why the sector is inefficient. This study sort to investigate the effect of firm characteristics on firm efficiency as solution to the registered inefficiency. The study was underpinned by financial intermediation theory, economic efficiency theory, capital structure theories, task technology fit theory, life cycle learning theory of the firm and neo institutional theory. The study adopted a positivist paradigm and causal research design. The study was survey in nature where quantitative data was extracted from all SACCOS audited financial reports between year 2015 to 2021.The target population was 176 deposit taking societies in Kenya as at 31st December 2021 and response rate was 100%. The study findings indicate that SACCOs efficiency has an increasing growth trend within the study period but is not optimal with variable return to scale contributing the highest levels in efficiency relative to scale efficiency, Capital structure does not significantly affect level of efficiency while technological investment has a negative but significant relationship to influence efficiency levels. SACCOs have maintained low levels of earning assets in adherence to regulation. Technological investment has significant but negative effect on the relationship between investment on technology and efficiency. The study recommends deposit taking savings and credit societies to formulate and implement long term survival strategies, put in place rebate payment policies as well as deposit collection strategies and government to reduce levies imposed on member’s deposit in order to enhance efficiency levels.
