Effect of Savings Impediments on the Performance of Selected Saccos in Nairobi County, Kenya
Keywords:
Savings impediments, income level, interest rate, credit mechanisms, performance of Selected SaccosAbstract
Purpose: This study sought to assess savings impediments on performance of select SACCOs in Nairobi County, Kenya. The objectives were to examine the effects of income level on savings impediments on performance of SACCOs; to analyse the effect of interest rate on Performance of SACCOs; and to examine the influence of credit mechanisms on Performance of SACCOs in Nairobi County, Kenya.
Methodology: The study was guided by a cross-sectional research design with the target population comprising of officials of five selected SACCOs. A sample size of 72 respondents was drawn from the target population. The results show that income level significantly affects the performance of SACCOs (p<0.05).
Results: Results between interest rate and performance of SACCOs show that interest rate had a negative and significant influence on the performance of SACCOs (p<0.05). Finally, the results show that credit mechanisms had a positive and significant effect on the performance of SACCOs (p<0.05).
Conclusion: The study concluded that income level, interest rate, and credit mechanisms had a significant impact on SACCO performance in Nairobi County. The study recommends that the SACCOs should ensure that target mechanisms should be put in place to attract members with diverse incomes. SACCOs should establish clear policies and procedures for managing interest rate risk within the SACCOs. SACCOs should ensure compliance with regulatory requirements governing credit operations.
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