EFFECT OF DIVIDEND POLICY ON FINANCIAL PERFORMANCE OF SAVING AND CREDIT CO-OPERATIVE SOCIETIES IN NAIROBI COUNTY, KENYA
Nduati Naomi Waithira - Master of Business Administration, Jomo Kenyatta University of Agriculture and Technology, Kenya
Dr. Joshua Matanda Wepukhulu - Lecturer, Jomo Kenyatta University of Agriculture and Technology, Kenya
ABSTRACT
Dividend policy has an influence on operations and financial performance in financial institutions. Regulated SACCOs Dividend policy determines the portion of shareholders’ earnings, which is distributed among the shareholders of the entity. Requirement for deployment of dividend policy in regulated SACCO could have impact on financial performance on Regulated SACCOs in Kenya. This motivates the undertaking on the current study to examine whether there exists a significant relationship between dividend policy and financial performance in SASRA regulated SACCOs. The objective of the study was to assess the relationship between dividend policy and financial performance among regulated SACCOs in Nairobi County, Kenya. The study adopted descriptive survey research design. The target population of the study was 29 registered DTS. The study used secondary data from financial reports in Deposit Taking SACCOs. The study used various data analysis techniques. First descriptive data analysis which include mean, standard deviation, mode and frequencies. Secondly, regression and correlation analysis was done. The findings were supported by regression results that established earning per share had an insignificant and negative effect on return on assets in SACCOs. The study established that dividend payout ratio had a positive and insignificant influence on financial performance in SACCOs. The results revealed that dividend payout ratio in Deposit Taking SACCOs have a positive trend. Further regression analysis indicated that retained earnings predict a significant and positive relationship with financial performance in Deposit Taking SACCOs. From the results, the study concluded that earning per share had an insignificant effect on financial performance in SACCOs. The study concluded that dividend payout ratio has insignificant effect on financial performance in DTSs in Kenya. The study concluded that dividend yield has an insignificant and positive effect on financial performance in Deposit Taking SACCOs in Kenya. The study also concluded that their dividend payout ratio predict positively and insignificant influence on financial performance in SACCOs in Kenya. From the results, the study concluded that retained earnings have a significant and positive relationship with financial performance in Deposit Taking SACCOs.
