Browsing by Author "Gichinga, Raphael Njenga"

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    Capital Structure and Firm Efficiency of Deposit Taking Saccos in Kenya
    (Journal of Finance and Accounting, 2024-04) Gichinga, Raphael Njenga; Gatauwa, James; Kimutai, Carolyne
    The stability and resilience of SACCOs' performance stood out both during and after the coronavirus epidemic. However, the average variable returns to scale regarding the ratio of members' deposits to loans issued by SACCOs is inefficient, with a ratio of less than one. This inefficiency impacts revenues and, in turn, the interest paid on members' deposits.. This study sort to investigate the effect of capital structure on the firm efficiency of deposit taking saccos in Kenya and was anchored on financial intermediation Theory, economic efficiency theory and capital structure theories. The study adopted a positivist paradigm and causal research design and target population of all 176 saccos as at 2021.A data review guide was used to extract secondary quantitative data from the saccos published financial reports from year 2015 to 2021. Stata version 13 was employed to run descriptive and inferential statistics after computing efficiency scores using data envelopment analysis model and results presented in graphs and tables. The study findings indicate that saccos efficiency has an increasing growth trend though not optimal with variable return to scale contributing the highest levels in efficiency relative to scale efficiency while capital structure does not significantly affect level of efficiency. The study recommends that the deposit-taking savings and credit management board strategize and implement a rebate payment policy, comply with regulations on external borrowing, and improve strategies for collecting deposits. Additionally, the study suggests further research to determine if specific elements of capital structure significantly influence the efficiency of deposit-taking savings and credit societies.
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    Firm Characteristics And Firm Efficiency Of Deposit Taking Savings And Credit Cooperatives Societies In Kenya
    (Kenyatta University, 2024-11) Gichinga, Raphael Njenga
    Saccos contributes 2% of Kenyan GDP where output of members` loans account a 73.9% of the total industry asset size while input of members deposits forms the main source of financing. Complaints on loan issuance and other short term obligations maintain relatively high levels at 24.69%,19.72% and 22.27% for years 2019, 2018 and 2020 respectively contrary to growing members` deposit contributions with an average paid interest on deposits declining from 7.1%, 6.72% and 6.01% from year 2017, 2019 and 2020 respectively. Studies relates the interplay between firm characteristic, liquidity mediatory role and moderation by SASRA as a remedy to the anomaly. This study`s general objective sort to investigate effect of firm characteristics on firm efficiency in deposit taking SACCOs in Kenya. Specifically, the study assessed effect of age, earning asset, capital structure and technological investment on firm efficiency of deposit taking savings and credit society in Kenya being moderated by SASRA regulations and mediated by liquidity levels. The study was underpinned by financial intermediation theory, economic efficiency theory, capital structure theories, task technology fit theory, life cycle learning theory of the firm and neo institutional theory. The study adopted a positivist paradigm and causal research design. The study was census in nature where quantitative secondary panel data was extracted from all SACCOS audited financial reports between year 2015 to 2021.The target population was 176 deposit taking societies in Kenya as at 31st December 2021 and response rate was 100%. Diagnostic tests were carried on panel unit root test for model effects suitability, tests on multicollinearity, normality, heteroscedasticity and autocorrelation to avoid spurious results. Efficiency scores were generated through data envelopment analysis model and regression analysis run through stata version13.Study findings, conclusions and recommendation were presented using graphs, tables and charts. The study findings indicate that Saccos efficiency is not optimal but has an increasing growth trend with variable return to scale contributing the highest efficiency levels relative to scale efficiency and constant return to scale efficiency. Age has a positive and statistical significance while capital structure has a positive but not significantly effect on level of efficiency. Technological investment and DTS` size has a negative but significant relationship to influence saccos efficiency levels. Saccos have maintained low levels of asset size in adherence to regulation in contrast to registered liquidity ratios above the minimum required threshold by authority. Additionally, the study established that liquidity mediates relationship of firm characteristics and firm efficiency while Sasra regulation does not significantly moderate relationship between firm characteristics and firm efficiency. The study recommends deposit taking savings and credit societies to formulate and implement long term survival strategies while concentrating on core business of loans issuance and cautiously engage on investment of excess funds. Management board should strategize and put in place rebate payment policy and adhere to the set regulations on external borrowing and enhance strategies on deposits collections. The study recommend government to reduce levies imposed on member’s deposit in order to enhance efficiency levels. The study suggests further research to ascertain whether the specific capital structure mix elements are significant influencers to deposit taking savings and credit societies` efficiency. Additionally, a study is recommended on the ideal deposit levy rate to ensure a balance between funding the regulation activities and deposit`s levies rate which is not detrimental to deposit taking savings and credit societies efficiency in Kenya.