Authors: Mirriam Mumbua Mwaluku and Geoffrey Mbuva
Kenyatta University, P.O. Box 43844-00100, Nairobi – Kenya
Author E-mail Address: mwalukumirriam@gmail.com
ABSTRACT
The financial performance of Savings and Credit Cooperative Societies (SACCOs) is crucial for economic development, particularly for low- and middle-income earners who depend on these institutions for accessible financial services. This study explored how internal firm characteristics—specifically firm size, leverage, and liquidity—affect the financial performance of Deposit-Taking Savings and Credit Cooperative Societies (DT-SACCOs) in Nairobi County, Kenya. An explanatory research design was employed, with secondary data collected from 42 DT-SACCOs over the period from 2018 to 2022. Using a census approach, comprehensive data collection was ensured, eliminating sampling bias and allowing for robust generalizations. Data were gathered from audited financial statements, ensuring accuracy and adherence to GAAP and SASRA standards, and were analyzed using descriptive and inferential statistical methods. The findings indicated that firm size significantly influenced financial performance, while leverage and liquidity did not have a significant impact. Larger SACCOs achieved better financial outcomes due to economies of scale, whereas debt leverage and liquidity management did not yield expected benefits, suggesting that operational efficiency and governance might be more critical factors. The study recommended that SACCOs focus on asset expansion and re-evaluate their financing strategies. Policymakers were urged to support SACCOs through regulatory frameworks that enhance asset and liquidity management. Future research should consider additional firm characteristics and external market conditions for a more comprehensive understanding of SACCO performance. Ethical considerations were addressed by securing necessary permissions from NACOSTI and Kenyatta University to ensure privacy and confidentiality.
Keywords: Firm Characteristics, Financial Performance, DT-SACCOs, Nairobi County, Firm Size, Leverage, Liquidity, Return on Assets (ROA)
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Suggested Citation
Mwaluku, M.M & Mbuva, G. (2024). Firm Characteristics and Financial Performance of Deposit Taking Savings and Credit Cooperatives in Nairobi County, Kenya. Journal of Management and Business Administration, 4, 27-35. Available online at https://writersbureau.net/journals/jmba/mirriam-firm-characteristics-and-financial-performance-of-deposit-taking-savings-and-credit-cooperatives-in-nairobi-county-kenya.pdf
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