EFFECT OF LIQUIDITY RISK MANAGEMENT ON FINANCIAL PERFORMANCE OF DEPOSIT TAKING SACCOS IN UASIN GISHU COUNTY, KENYA
Titus Kibet Keben - Student, Jomo Kenyatta University of science and technology, Kenya
Kimani E. Maina - Lecturer, Jomo Kenyatta University of science and technology, Kenya
ABSTRACT
Liquidity management has a significant positive effect on financial performance. Companies trying to have their financial performance goals achieved have to consider adopting liquidity management practices. This study sought to determine the effect of liquidity risk management on financial performance of deposit taking SACCOs in Uasin Gishu County, Kenya. This research was based on liquidity risk theory. Cross-sectional survey research design was used. The target population was all the licensed deposit taking SACCOs in Kenya. The Accessible population was therefore the top level management and middle level cadre employees working in all registered deposit taking SACCOs in Uasin Gishu County. A two stage sampling technique was used. The study employed purposive sampling to select 3 top level managers and 1 operation manager in each of the 10 sampled DTSs and simple random sampling in selecting the credit officers and the accountants. The researcher obtained sample size using Slovin’s formula. Therefore a total of 63 respondents were identified for the study. The study collected primary data using questionnaires and secondary data from journal articles. To determine the validity of the questionnaire items, research experts were used to examine them and their suggestions and comments were used as a basis to modify the research items. Cronbach alpha coefficient was used as a reliability test. A value of above 0.7 confirmed the reliability of the research instruments. The data was analyzed using both inferential statistics where multiple regression and correlation was used. Descriptive statistics included use of frequencies, percentages, mean and standard deviation. Data was presented by use of tables and charts. The study findings indicated that Liquidity risk management (t=8.037; sig=0.000), was a significant factor that enhance financial performance of SACCOs in Uasin Gishu County, Kenya. The study recommended that liquidity management practices are significantly relevant hence its process must be supported by strong and effective governance.
