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Mwangi Francis Mugoto - Masters of Business Administration, Kenyatta University, Kenya

Dr. Phelgonah A. Genga - Kenyatta University, Kenya


The disclosure requirement is gaining significant attention to users of financial information to enable them to make informed decisions. Such users include suppliers, shareholders, employees, Government and potential investors in DT-Saccos among others. Operationalization of the Sacco Societies Act, Cap. 490B was aimed at among other things deepening transparency and strengthening corporate governance in deposit-taking Saccos. Those charged with governance are required to make adequate disclosures on key regulatory standards in the financial statements. The study aimed at analyzing the influence of SASRA disclosure requirements on overall financial performance of deposit-taking SACCOs present in Kenya. Specific objective for the project were to determine how large risk exposures, insider lending, capital concentration and audit matters impact on deposit-taking SACCOs and their financial performance in Kenya. This research targeted all DT-Saccos operating in Nairobi County which were 41 in number. The data was collected through the use of questionnaires. After collection of data it was then analyzed using descriptive statistics and inferential methods. Descriptive methods involved the use of percentages, means, and standard deviation values. The study found out that capital limits had (β=0.206, t=12.034>1.96 and p=0.000<0.05), large risk exposures had (β=0.487, t=6.209>1.96 and p=0.000<0.05), insider loans had had (β=0.170, t=4.422>1.96 and p=0.000<0.05) and audit issues had (β=0.191, t=9.988>1.96 and p=0.000<0.05) an indication that the variables significantly influenced financial performance of deposit taking SACCOs in Kenya. The findings of regression analysis established that coefficient of correlation was 0.825 an indication of strong positive correlation between the study variables. Coefficient of adjusted determination R2 was 0.672 which translates to 67.2% an indication that variations of dependent variables can be traced by the independent variables. The study concludes that External borrowing above 25% of total assets affected SACCO financial performance. Existence of a dividend policy protected Sacco capital. DT-SACCOs were exposed to large risk exposures due to quarterly reporting to SASRA on loans classifications. Risk profiling of members before issuance of loans exposed DT-SACCOs to risk exposure. Terms and conditions of the loans to insiders affected performance of DT-Saccos'. Bi-monthly notification to SASRA upon insider loans issuance affected the net surplus of saccos. Adherence of code of conduct to streamline operations influenced net surplus of DT-deposit taking Saccos. Formulation of policies was in line with the Sacco regulations. The study recommends that external borrowing above 25% of total assets ought to affect SACCOs financial performance. Capital structure ought to affect the financial performance of DT-SACCOs. Financial disclosures ought to raise confidence and trust in DT- SACCOs. Risk profiling of members before issuance of loans ought to expose DT-SACCOs to large risk. Introduction of new loan products in line with regulatory provisions ought not to expose the DT-SACCOs to risk. Bi-monthly notification to SASRA upon insider loans issuance ought to affect the net surplus of saccos. Compliance on code of conduct regarding insider lending ought to affect performance of deposit taking saccos. Formulation of policies ought to be in line with the DT- Sacco regulations. Establishment of various board committees for oversight of key functions and direction ought to positively influence net surplus of deposit taking Saccos.

Full Length Research (PDF Format)