MICROFINANCE SERVICES AND FINANCIAL PERFORMANCE OF DEPOSIT TAKING SACCOS IN NAIROBI CITY COUNTY, KENYA
MICROFINANCE SERVICES AND FINANCIAL PERFORMANCE OF DEPOSIT TAKING SACCOS IN NAIROBI CITY COUNTY, KENYA
Margaret Siameto Kamurar - Master of Business Administration (Finance Option) of Kenyatta University, Kenya
Dr. Geoffrey Mbuva (PhD) - Master of Business Administration (Finance Option) of Kenyatta University, Kenya
ABSTRACT
DT SACCOs are financial institutions which offer micro credit services to their members and as a result pivotal contribution towards poverty eradication and creation of jobs arises. However, the conceptual linkage between the aforementioned services they offer to their members and the fluctuating financial performance is still controversial. The academic concern of the current study was to interrogate the causal effect of micro finance services on financial performance of those DT-SACCOs carrying out their ordinary business activities in the County of Nairobi City Kenya. More precisely, the study aimed determining the effect of micro credit on financial performance of DT-SACCOs in Nairobi City County, Kenya. Microfinance theory and bank-led theory are the two key suppositions underpinning the current investigation. Since the populace was made up of 42 unit of analysis which was the DT-SACCOs operating in Nairobi City County, survey approach was be relied upon by the researcher when collecting the necessary data. During the actual data collection exercise, the approach of drop and pick the questionnaire was relied upon by the researcher. The unit of observation was the corresponding 42 top management members of each SACCO aforementioned. A data collection schedule was most appropriate and was used for collecting the secondary data. Descriptive, correlational and inferential data analysis were performed after the diagnostic test was completed. It was revealed that micro credit influenced financial performance which was statistically significant and of direct nature. The management group of DT-SACCOs domiciled in the Nairobi City County, Kenya will benefit from the research findings for well-informed decision making will be much in order as far as financial performance improvement is concerned. The point here is that those financial institutions will be able to project the profitability in future with micro credit which they are aware of its prediction power when considered in isolation. SASRA which is a government arm will benefit from the research findings for the contextual viewpoint addressed herein pinpoints areas of enabling policy making to create user-friendly techno financing environment for DT-SACCO members which by extension will promote the social-wellbeing of the nationals in Kenya through more job creation. This study is of its kind in the academic frontier for the scholars will have a cornerstone to guide them on identifying the other relevant contextually researchable areas. That is the study outcome is a reliable empirical anchorage for the linkage between other micro finance services and profitability where by other unit of analysis such as commercial banks, Microfinance Banks which are financial institutions can be brought to research books. Therefore, more suitable empirical models may be created by factoring other micro finance service aspects which significantly address each financial institution.
