Strategic Factors Influencing the Performance of Deposit-Taking Saccos in Kiambu County, Kenya

Abstract

SACCOS play a pivotal role in the economy and the financial landscape, particularly in empowering individuals and communities through collective savings and access to credit. This study was driven by the increasing number of SACCOs facing deregistration and and others have collapsed due to poor performance and failure to fulfill their obligations to members. This study investigated the influence of strategic factors on performance of the Deposit-taking SACCOS in Kiambu County Kenya. The study sought to deepen the understanding of the strategic factors influencing the performance of Deposit-Taking SACCOs in Kiambu County. The objectives of the study were to examine the influence of innovation and technological advancements, to determine the influence of management competence, and to assess the influence of the role of internal controls on the performance of Deposit-Taking SACCOs in Kiambu County. The study was anchored on Resource- Based View, Schumpeter's Theory of Innovation, Agency Theory, and Transformational Leadership Theory. A descriptive research design was adopted, focusing on all the 13 Deposit-Taking SACCOs in Kiambu County registered with SASRA as of December 30, 2022. A census was taken because the SACCOs licensed by SASRA were only 13 in number. The study focused on the management team consisting of 110 individuals and gathered data using semi-structured questionnaires. The collected data was analyzed using inferential and descriptive statistics. Inferential data were examined using a multiple linear regression model, while descriptive data was analyzed through content analysis and presented in form of figures and tables. The quantitative analysis showed that all three factors had a positive influence on SACCO performance, with internal controls having the most significant effect. Specifically, robust internal controls proved crucial for maintaining financial accuracy and operational efficiency, while effective management competence and technological advancements fwere found to enhance SACCO performance. The study highlighted the need for SACCOs to prioritize on strengthening internal controls, invest in technological innovations, and improve management practices. The study provided essential recommendations for various stakeholders in the realm of Deposit-Taking SACCOs (DT-SACCOs). Policymakers and government agents were encouraged to develop models that enhance corporate governance and strategic leadership within the sector. Regulatory bodies were advised to enforce stringent standards for internal controls and facilitate training programs tailored for SACCO management. Consultants were positioned to leverage these insights to guide SACCOs in the effective implementation of strategic initiatives and technological integration. Furthermore, it was emphasized that SACCO management and boards of directors should prioritize leadership training and establish accountability measures within their operational policies. These recommendations aim to bolster the performance and sustainability of DT-SACCOs in a competitive financial landscape