An investigation into the impact of regulations on performance of deposit-taking savings & credit co-operatives in Kenya
Gathige, John M.
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Kenya's Saccos have grown at a tremendous rate in the past years but have had no effective' regulatory framework that captured the deposit taking aspect of the Sacco societies until 2010. Following the enactment of the Sacco Society Act of 2008, the Sacco Societies Regulatory Authority (SASRA) was introduced in 2010 to license, standardize, regulate and control the operations of deposit-taking Saccos. The authority ensures that all deposit-taking Saccos are licensed and observe prudential standards that are set. Nevertheless, little is known about how these regulations have impacted the performance of the deposit-taking Sacco societies. This prompted the research to find out the impact of these regulations on performance of deposit-taking Sacco societies. It had been practically difficult for the key players in the deposit-taking Saccos to effectively implement the regulations set by SASRA without clear understanding of how they affect performance of their Saccos. The purpose of . this study was therefore, to assess the impact of these regulations on the performance of the deposit-taking Saccos in Kenya. The study aimed at providing valuable information to the key players in the co-operative movement about how the performance of the deposit-taking Saccos was affected by these regulations. The objective of this study was to determine how licensing, capital adequacy, governance and reporting requirements impacted the performance of deposit-taking Saccos in Kenya. Previous related studies, theories and other literatures were reviewed to support the study. On collection of data, questionnaires with both structured and unstructured questions were used. Face-to-face interview was also carried out where the researcher needed to clarify or to probe for more information. The study was a census and the population was 34 respondents each drawn from all the 34 registered deposit-taking Saccos in Nairobi County. The collected data was then analyzed using descriptive statistics and the results presented using frequency tables, charts and graphs. A linear regression model was also used to determine the nature of impact that the independent variables had on the dependent variable. From the presented information, conclusions on whether and how these regulations affected performance of deposit-taking Sacco societies was drawn and recommendations made from there.