Internal Factors Strategically Influencing Growth of Savings and Credit Cooperatives in Uasin Gishu County

Abstract

The financial intermediation role played by Savings and Credit Co-operatives (SACCOs) is well appreciated. Therefore, growth of these saving and credit societies will ultimately bring multiplier effects allowing members to achieve economic empowerment and improve investment climate. To achieve growth, internal factors within the organization remain paramount. Therefore, to bridge this gap this study sought to determine internal factors influencing growth of savings and credit cooperatives in Uasin Gishu County. The specific objectives of this study were; determine how the liquidity, technology, strategic management and loan portfolio affect SACCO growth in Uasin Gishu Kenya. The study adopted both explanatory and descriptive research designs. The study was guided by Ansoff Growth Matrix Theory; the target population was derived from 10 licensed SACCOs. A desired sample size of 63 was computed from the target population. The sampling method used was proportionate stratified random sampling method to select the respondents. Questionnaires were used in data collection. Descriptive statistics were analysed using frequencies and percentages while inferential statistics were analysed using Pearson Correlation, Multiple Regression and Analysis of variance with the aid of SPSS (V.23). Findings from the study indicated that there was a significant influence of liquidity on the SACCO growth in Uasin Gishu County. The findings also established that there was a significant positive influence of technology adopted on the SACCO growth in Uasin Gishu County. Study found a significant influence of Strategic management skills on SACCO growth in Uasin Gishu County. Similarly, it was established that that there was a significant influence of Portfolio balance on SACCO growth in Uasin Gishu County. The study concluded that managing asset quality, cash reserves, loan repayment strategies, and capital reserves are crucial for SACCO growth. The study also concluded that technology adoption, including computerization and internet connectivity, has improved loan disbursement, communication, and member services for SACCOs in Uasin Gishu County. It was also concluded that, while target job training did not significantly impact SACCO membership and growth, factors such as budget allocation for training, improved loan management, fast decision-making, and innovation were important for SACCO growth. The study revealed that having loan repayment strategies, addressing loan recovery challenges, loan monitoring, credit history understanding, and collateral presence are crucial for SACCO growth by minimizing risk for lenders. It is hoped that the findings of this study will be helpful strengthening SACCOs, officials, members and even staff on the internal factors determining the SACCO growth which may be extrapolated to other counties.