Browsing by Author "Njuguna, Sarah Wambui"

Now showing 1 - 2 of 2
  • Thumbnail Image
    Item
    Financial Risk Management Practices and Asset Quality of Deposit Taking Saccos in Nyeri County, Kenya
    (International Academic Journal of Economics and Finance (IAJEF), 2025-09) Njuguna, Sarah Wambui; Gitagia, Francis
    The sustainability of deposit-taking SACCOs depends on asset quality since it directly affects their financial situation, stability, and capacity to properly control risks, therefore ensuring long-term survival. SACCOs nationally have battled changing asset quality with non-performing loans ranging from 1.98 percent to 2.4 percent between 2019 and 2023. Asset quality in Nyeri County has been even lower, ranging from -1.4 percentage to 3.5 percent, so stressing more difficult maintenance of financial stability than national norms. The research to determine the effect of; liquidity risk management practices on asset quality of deposit taking SACCOs in Nyeri County, Kenya. The time scope of the study was the period between 2019-2023. The study was informed by the Liquidity Preference Theory. The research used descriptive research design. The unit of analysis was 11 deposit-taking SACCOs in Nyeri County. The unit of observation was operations Managers, credit Managers and risk management Managers of each of the SACCOs. The study utilized census to select a sample of 33 selected managers. The study employed both primary and secondary data. Primary data was collected through a questionnaire while secondary data was obtained utilizing data collection sheet. Various diagnostic tests were carried out including. The tool of analysis was Statistical Package of Social Sciences Version 24. Both descriptive and inferential statistics were employed to analyze the data. Descriptive statistics utilized percentages, frequencies, measures of central tendencies (mean) and measures of dispersion (standard deviation) while inferential analysis involved use of correlational analysis and panel regression analysis. Data was displayed tables and graphs. The research found that effective management of liquidity ensures that SACCOs may meet their short-term financial obligations, manage withdrawal requests, and avoid liquidity shortages that can cause financial instability. Preserving asset quality and preventing defaults depend on this approach. The research concluded that the financial risk management policies in Nyeri County, Kenya, had poor quality more especially, SACCO asset quality is affected by effective strategies of financial risk management including liquidity risk management, strategic risk management, interest rate risk management. The research recommends that implementing best practices in liquidity risk management would allow SACCOs to ensure they can satisfy their financial obligations and avert liquidity difficulties. Regulatory bodies like SASRA should also set and apply risk management requirements more aggressively.
  • Thumbnail Image
    Item
    Financial Risk Management Practices and Asset Quality of Deposit Taking Saccos in Nyeri County, Kenya
    (Kenyatta University, 2025-09) Njuguna, Sarah Wambui
    Globally and locally, deposit-accepting Savings and Credit Cooperatives (SACCOs) are vital in promoting financial inclusion and economic progress by offering accessible financial services to marginalized populations and encouraging savings and credit access. The quality of their assets is paramount for the overall sustainability of these SACCOs, directly influencing their fiscal well-being, stability, and capacity to effectively manage potential hazards, thus securing their long-term viability. Within Kenya, SACCOs have experienced variability in asset quality, with non-performing loans fluctuating between 1.98% and 2.4% from 2019 to 2023. Nyeri County's asset quality has exhibited even wider fluctuations, varying between -1.4% and 3.5%, suggesting more pronounced difficulties in preserving financial soundness relative to nationwide benchmarks. This research intends to determine how financial risk management approaches influence the asset quality of deposit-taking SACCOs in Nyeri County, Kenya. Specifically, it will examine the impact of managing liquidity, interest rate, operational, and strategic risks on the asset quality of these SACCOs within the county. The study will cover the period between 2019 and 2023 and will be guided by the Liquidity Preference Theory, Interest Rate Parity theory, Operational Risk Management Theory, and the Resolving on Quality Asset Theory. A descriptive research design will be employed. The units of analysis will be the 11 deposit-taking SACCOs in Nyeri County, with operations managers, credit managers, and risk management managers from each SACCO serving as the units of observation. A census will be used to select a sample of 33 managers. Both primary and secondary data will be utilized. For the acquisition of firsthand information, surveys will be the chosen method. Conversely, existing information will be compiled through the utilization of data extraction forms. A preliminary investigation will be carried out in the municipality of Nyeri, encompassing a pair of Savings and Credit Cooperatives. The consistency of the research tools will be evaluated via Cronbach’s Alpha for reliability, and the relevance and predictive power will be examined for validity. Several diagnostic evaluations, such as tests for Normal distribution, collinearity among variables, unequal variance of errors, serial dependence, and the appropriateness of random or fixed effects models, will be executed. The Statistical Package for the Social Sciences will serve as the main analytical software. Both summary statistics and statistical inferences will be employed for data interpretation. Summary statistics will include proportions, counts, central tendency metrics (average), and variability metrics (standard deviation), whereas inferential analysis will involve correlation and panel regression techniques. The presentation of findings will utilize tabular and graphical formats. All ethical principles to guarantee the accuracy of the information will be strictly followed