EFFECT OF MANAGEMENT EFFICIENCY ON FINANCIAL PERFORMANCE OF SAVINGS AND CREDIT SOCIETIES IN KENYA
DOI:
https://doi.org/10.47672/jsm.287Keywords:
management efficiency, financial performance, savings and credit societiesAbstract
Purpose: The purpose of this study was to evaluate the effect of management efficiency on financial performance of savings and credit societies in Kenya.
Methodology: The study employed an explanatory research design. The target population was 83 registered deposit taking SACCO's in Kenya that have been in operation for the last five years. The sample size for the study was all 83 SACCOs that have remained in existence since 2011-2015. Census methodology was used in the study. Both primary and secondary sources of data were employed. Multiple linear regression models were used to analyze the data using statistical package for the social sciences (SPSS) and STATA. A pilot study was conducted to measure the research instruments reliability and validity. Descriptive and inferential analysis was conducted to analyze the data. The data was presented using tables and graphs.
Results: Based on the findings the study concluded that management efficiency has no significant influence on the financial performance of savings and credit societies in Kenya. The univariate regression results showed that management efficiency has no significant influence on the financial performance of savings and credit societies (p=0.173).
Unique contribution to theory, practice and policy: The study recommended that with regard to credit risk management, the management should undertake measures to improve Capital adequacy, Asset quality, Management efficiency, Earnings and Liquidity. Further, the study recommended that SACCO's should train their employees as this is likely to increase their productivity.
Downloads
References
Arnould, R. J. (1985). Agency costs in banking firms: an analysis of expense preference behavior. Journal of Economics and Business, 37(2), 103-112.
Bataineh, K. (2014). Impacts of Employee Training on the Performance of Commercial Banks in Jordan. European Journal of Business and Management, 6(27), 192-196.
Berger, A. N. (1995). The Profit-Structure Relationship in Banking Tests of Market-Power and Efficient-Structure Hypotheses. Journal of Money, Credit and Banking, 27(May 1995), 404-431.
Chaudhry, S., Singh, S. (2012); Impact of Reforms on the Asset Quality in Indian banking .International Journal of Multidisciplinary. 5(2), 17-24.
De Nicolò, G. Boyd, J. H., & Jalal, A. M. (2006). Bank risk-taking and competition revisited [electronic resource]: new theory and new evidence. International Monetary Fund.
DeYoung, R. E., Hughes, J. P., & Moon, C. G. (2001). Efficient risk-taking and regulatory covenant enforcement in a deregulated banking industry. Journal of Economics and Business. 53(2), 255-282.
Edwards, F. R. (1977). Managerial Objectives in Regulated Industries: Expense-Preference Behavior in Banking. Journal of Political Economy. 85(1), 147-161.
Gropper, D. M., & Oswald, S. L. (1996). Regulation, deregulation and managerial behaviour. Applied Financial Economics, 6(1), 1-7.
Hannan, T. H. (1979). Expense-preference behavior in banking: A reexamination. Journal of Political Economy. 87(October), 891-895.
ICA (2009). 59th Annual Annual Conference.Chicago,IllinoisUSA
Chicago Marriott
Infeacho, C & Ngalawa, H. (2014).Performance of the south African banking sector since 1994. Journal of applied business research (jabr),30(4)1183-1196
John, A. (2002). Rochdale Pioneer. The Oxford Companion to British History .
Kimari, F. N. (2013). Effect of credit risk management on financial performance of deposit taking savings and credit cooperative societies in Kenya (Doctoral dissertation, University of Nairobi).
Kinyua, J. W. (2013). Relationship between financial performance and size of deposit taking Savings and Credit Cooperative Societies in Kenya (Doctoral dissertation, University of Nairobi).
Kioko, C. (2014). Credit information sharing influence on performance of licensed deposit taking SACCO businesses in Kenya. Strategic Journal of Business & Change Management, 1(2).
Maseki, C. (2012). Knowledge management and performance of commercial banks in Kenya (Doctoral dissertation, University of Nairobi).
Ngaira, L. (2011). The impact of SACCO regulatory authority guidelines on SACCO operations in Kenya-the case of Nairobi deposit taking SACCO's (Doctoral dissertation, School of Business, University of Nairobi).
Ngo'mbe, B.W. & Mikwamba, E. (2004). Know more about SACCO. A handbook for SACCO study circle programme. Malawi Union of Savings and Credit Cooperative, Lilongwe, Malawi.
Rees, R. (1974). A reconsideration of the expense preference theory of the Firm. Economica, 41(2), 295-307.
Said, R.M., Mohd, H. T,(2011). Performance and financial ratios of commercial banks in Malasia and china.
Smirlock, M. (1985). Evidence of the (Non) Relationship between Concentration and Profitability in Banking. Journal of Money, Credit and Banking, 17(1), 69-83.
Sonja, K. (2010). Effect of computerization on performance of saccos in Uganda. Unpublished MBA research project Reutlingen Germany.
Tahir, A., & Sajjad, S. (2013). Assessing the Impact of Training on Employees' Performance in Commercial Banks in Urban Lahore.
Thoraneenitiyan, N. (2010). Measuring Bank Peformance in the Current Evolving Market Place. Abac Journal, 30(3), 1-14.
Wanyama, F. O., Develtere, P., & Pollet, I. (2008). Encountering the evidence: Co-operatives and poverty reduction in Africa. Journal of Co-operative Studies, 41(3), 16-27.
Williamson, O. (1963). Managerial discretion and business behavior. American Economic Review, 53(December), 1032-1057.
Zerfeshewa, B. (2010). Determinants of Saving and Credit Cooperatives (SACCO's) Operational Performance in Gondar town, Ethiopia (Doctoral dissertation, Mekelle University).
Downloads
Published
How to Cite
Issue
Section
License
Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution (CC-BY) 4.0 License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal.
