Effects of Liquidity and Investment Policies on Financial Growth of Savings and Credit Cooperative Societies in Kenya: A Case of Deposit Taking Saccos in Nairobi County
- June 7, 2019
- Posted by: RSIS
- Category: Social Science
International Journal of Research and Innovation in Social Science (IJRISS) | Volume III, Issue V, May 2019 | ISSN 2454–6186
Dr John Cheluget (PhD)1, Gitonga Mirigo Loise2
1Deputy Vice-Chancellor of The Management University of Africa
2EMBA, The Management University of Africa
Abstract:-Financial growth of savings and credit cooperatives in Kenya has an effect on the welfare of citizens in Kenya. This is because SACCOs encourage their members to save since they are readily accessible. The main objective of the study was to assess the determinants of financial growth in the savings and credit cooperative societies in Nairobi County. The specific objectives of the study were; to determine the effect of liquidity on financial growth in the SACCO industry in Nairobi County and to find out the effect of investment policies on financial growth in the SACCO industry in Nairobi County. The study adopted a descriptive research design. The target population of the study consisted of 42 licensed SACCOs in Nairobi County. The study used a formula of Kothari (2004) to determine the sample size that was 38 SACCOs in Nairobi County. The study collected both primary and secondary data. Primary data was collected using questionnaires. Secondary data was collected from annual reports of the SACCOs and the SASRA Annual Reports covering the period 2010-2014. The collected data was coded into SPSS software version 24 for analysis. The findings were analyzed using descriptive and inferential statistics. The descriptive statistics entailed use of means and standard deviations while inferential statistics included use of regression analysis. The findings were presented using Graphs and Frequency Distribution Tables. Based on correlational results, liquidity and investment policies all have significant influence on financial growth of SACCOs. The study concludes that liquidity was a significant determinant of financial growth of SACCOs with a strong positive correlation on financial growth. Investment policy was a critical determinant of financial growth of SACCOs in Kenya. The study recommends that the management of all SACCOs in Kenya should strengthen their liquidity levels by effective management of trade payables, receivables, inventories and cash. The management of SACCOs should improve on their investment policies by incorporating Specific Measurable Attainable Realistic and Time (SMART) bound goals and objectives.
Key Words: Financial Growth, Savings and Credit Cooperative Societies, Deposit Taking SACCOs, liquidity and investment policies.
