Effect of Cash-Flow Planning on the Financial Performance of Deposit-Taking Savings and Credit Co-Operative Societies in Samburu County, Kenya
DOI:
https://doi.org/10.70619/vol5iss6pp36-47-631Keywords:
Cash-flow Planning, Financial Performance, Deposit-Taking Savings and Credit Co-operative Societies, Samburu County, KenyaAbstract
Rural SACCOs often face irregular cash inflows, high delinquency rates, and low deposit mobilization capacity. These disparities underline a persistent institutional gap in liquidity strategy and financial resilience in rural SACCOs. The purpose of the study was to assess the effect of cash-flow planning on the financial performance of deposit-taking savings and credit co-operative societies in Samburu County, Kenya. Liquidity Preference Theory was the main theory of the study. The study employed a descriptive cross-sectional design. The unit of analysis for this study consisted of the 30 licensed deposit-taking SACCOs in Samburu County. The study targeted all 120 eligible respondents, comprising finance managers, accountants, internal auditors, and operations managers from all 30 deposit-taking SACCOs. The census method was used to sample the study respondents. Data was collected using structured questionnaires and analysed through descriptive and inferential statistical methods. The present study conducted a pilot test with 12 participants, representing approximately 10% of the total population of 120 respondents. These participants were drawn from three deposit-taking SACCOs in Isiolo County with similar operational profiles. The study established a moderate and statistically significant positive relationship between cash flow planning and financial performance. Regression analysis showed that cashflow planning explained 29.1% of the variance in financial performance, with a one-unit increase in cashflow planning resulting in a 0.639-unit increase in financial performance. The findings concluded that effective cash flow forecasting, budgeting practices, and alignment of inflows and outflows improve liquidity readiness and operational efficiency. It is recommended that deposit-taking SACCOs adopt formalized cashflow planning frameworks to guide liquidity management decisions. These frameworks should incorporate tools for cash flow forecasting, cash budgeting, and inflow–outflow alignment. SACCOs should establish liquidity reserve policies to safeguard against unanticipated financial obligations and ensure uninterrupted service delivery.
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