The Effect of Licensing Requirements on the Performance of Cooperatve Societies in Kenya. A Survey of Deposit Taking Sacco Societies in Nakuru County.
Macharia, Harrison Kamau
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Sacco Society regulatory authority SASRA is a semi autonomous government agency operating under the ministry of cooperative development and marketing .It was created by section 40f the SACCO society act 2008 .It has the duty to license and supervise all deposit taking Sacco Societies in Kenya .Its operation are guided by the cooperative societies Act, Sacco society Act and Sacco society regulations 2009.The regulation came into force in June 2009.The setting up of SASRA was in response to 'the rapid growth of the Sacco without a corresponding legal framework to guide its growth and development. With this in mind the SACCO Societies Act in 2008 was enacted to provide fOTlicensing, regulation and supervision of deposit taking Sacco Societies through the adoption of prudential and non prudential regulations. Therefore the establishment of SASRA was in line with the Governments fmancial sector reform initiative. It should be remembered Kenya seeks to strengthen its position as a financial hub for the region and as a reference point for financial development The ongoing financial reform process in the financial sector seeks to first ~ect the interest of Sacco members and ensure public confidence towards the Sacco sector and secondly to SpUTKenya's economic growth through mobilization of domestic savings. SASRA immensely contributes to the national co-operative sector flagship projects and support initiatives by developing and implementing relevant programmes and activities in cooperative governance, safety and security of members' deposits, business process automation in the Sacco sub-sector" research and development in the Sacco sub-sector, as well as carrying out education and training programmes for regulated Sacco Societies. The general objective of the study is to asses licensing requirements all performance of deposit taking SACCOs in Kenya. The specific objectives -of the study were: To asses the effect of capital adequacy on the performance of deposit taking SACCOs in Kenya. To asses the effect of Management information system on the performance of deposit taking SACCOs Kenya, To assess the effect of corporate governance on the performance of deposit taking SACCO in Kenya .The study adopted the descriptive research design. The target population was 65 respondent comprising of senior management staff and Board of Directors of 3 licensed deposit taking Sacco Societies in Nakuru County. The questionnaire design adopted both open ended and close ended questions from which respondents were required to fill in. The researcher used questionnaires to solicit data from the subject. The results of the analysis were presented and interpreted in the form of tables and charts, percentages tabulation frequencies mean and other measure of central tendency .Tables were used to summarize the responses for further analysis and facilitate comparison thus generating qualitative reports of the study. Most SACCOs reported improvement in their performance both in membership, portfolio and efficiency. His is attributed to be the result of SACCO Licensing requirements. Most SACCOs are complying with the regulator requirement so as not to be locked out of the business by the operator. It is also clear from the study that all the SACCOs are conversant with the new licensing law.