Gender Diversity And Financial Performance Of Sacco’S In Siaya Country, Kenya.

International Journal of Research and Innovation in Social Science (IJRISS) | Volume VI, Issue II, February 2022 | ISSN 2454–6186

Gender Diversity And Financial Performance Of Sacco’S In Siaya Country, Kenya.

Enock Odhiambo Ong’ure¹, Mr. Dominic Ngaba ^2
1,2Department of Accounting and Finance, School of Business, Kenyatta University, Kenya

Abstract:
Majority of the SACCOs in Siaya County are struggling a lot to execute local obligations let alone to apply board diversity due to their limited capability. Weak corporate governance according to various studies has been the root cause of failure of most financial institutions. Diversity of the board can also be at a greater risk to be influenced with other direction with personal agendas. The study generally examined the effect of gender diversity on the financial performance of Siaya County, Kenya. A descriptive design of research was employed. The unit of analysis are the 285 respondents drawn from the 57 SACCOs. Data was collected using questionnaires. The technique on stratified random sampling was made use of which led to the selection of 50% of the board members from each SACCO. Therefore, the sample size comprised of 143 respondents. Collection of data was done using questionnaires which were semi structured. Content validity was used through consulting the supervisor assigned by testing the tool to check whether it measures the intended purpose of the study. Test retest method was employed to ensure reliability of the questionnaires. Quantitative data was analysed using descriptive analysis and utilization of inferential analysis was done in establishing the degree to which variables related which involved analysis in multiple regression. The study found that gender diversity had a positive and significant effect on financial performance. The study concludes that having a high proportion of female board members had a positive effect on financial performance. The study recommends that deposit taking Saccos in Siaya County, Kenya should try to incorporate more female members as it was proved to translate to more returns in terms of Sacco financial performance.

Keywords: Gender Diversity, Financial Performance

INTRODUCTION

Savings and Credit Cooperative (SACCO) is formed with the aim of pooling members’ savings and as a result offer credit facilities to them (Lari, 2015). According to Wamaitha (2017) additional SACCO objectives entail encouraging members thrift as well as encouraging the members on how to properly their cash and investing effectively. Those who live in urban areas and earn salary have formed their SACCOs, also in rural areas farmers have also formed SACCOs. Those who deal with trading, transportation, jua kali sector have also formed a community based SACCOs. Certainly, a diversified offering of SACCO services and products has contributed to a new definition in Kenyan financial sector. Their main aim is to make savings which has been effectively alleviated poverty and is essential to sustaining the development of the economy (Kenani & Bett, 2018).
The importance of Sacco’s cannot be undermined considering their significance in the development of country economic status both in developing and developed countries. Financial performance of Sacco’s is therefore crucial to sustainability on which economic security vitally depends on. The major determining factor of SACCO’s performance is the management, the board to be particular. They are the decision makers of any institution. The impediment of this notion is board diversity on the basis of age, interest cultural group, experience, expertise, socio- economic status and the board gender difference. If Sacco’s lack element of diversity in their organizations, then the institution board will deny the institution robust and harmonized decisions which are reflected in the financial accounts.

Read More