Browsing by Author "Wanjiru, Peter Njuguna"

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    Corporate Governance Structure and Profitability of Deposit Taking Savings and Credit Co-Operative Societies in Nyeri County, Kenya
    (IJSER, 2019) Wanjiru, Peter Njuguna; Omagwa, Job
    Despite being great potential agents for national development in Kenya, SACCOs perform poorly. This poor performance points in a nutshell to the poor corporate governance practices by board of directors or other bodies that have been entrusted with the responsibility of governing the SACCOs. Corporate governance is tasked with overseeing and supervising management to ensure that organization goal and objectives are met. Studies that have been done on the effects of corporate governance structure on profitability show inconclusive results. Some studies found no relationship between corporate governance structures and profitability while other studies document a positive relationship. Further, there are limited studies on developing economies since most studies focus on developed economies. The study conducted a census of the 8 deposit taking SACCOs in Nyeri County and purposive sampling method was used to select 4 respondents from each SACCO making a sample of 32 respondents. A questionnaire was used to collect primary data while secondary data was obtained from the deposit taking SACCOs regulator SASRA via their website. The study adopted descriptive research design. Multiple regression analysis results indicated that 57.7% change in profitability of the deposit taking SACCOs were explained by corporate governance structure. Gender Diversity had a p-value of (p=0.004<0.05) indicating that it had significant effect on the profitability of deposit taking SACCOs hence the null hypothesis was rejected. Similarly, occupational expertise had a p-value of (p=0.011<0.05) indicating that it had a significant effect on the profitability of deposit taking SACCOs hence the null hypothesis was rejected. Finally, directors’ age had a p-value of (p=0.014<0.05) indicating that it had a significant effect on profitability of deposit taking SACCOs hence the null hypothesis was rejected. The study recommended that SACCOs should put in place by-laws that support gender balance, set minimum academic and professional qualifications as well as directors’ age to ensure quality governance, professionalism and inclusivity. SASRA, being the deposit taking SACCOs regulator should set regulations and conditions regarding corporate governance structure to ensure quality boards are in place to deliver their mandate to shareholders.
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    Prudential Regulation And Financial Health Of Deposit Taking Savings And Credit Cooperative Societies In Kenya
    (Kenyatta University, 2025-05) Wanjiru, Peter Njuguna
    Deposits taking savings and credit cooperatives societies segment plays a significant role in the country’s economic growth and the stability of its financial system. It promotes saving, investment and financial inclusion through financial intermediation. Though there exist prudential regulation that guides these financial institutions, some have had their licenses revoked, while others had their licenses renewed conditionally. In addition, the of trend of the segment’s financial health as reflected by return on assets has been fluctuating, implying that the segment has not been continuously optimising utilization of the assets at its disposal. This makes the financial forecasting and planning of the segment challenging. The general objective of the study was to investigate the effect of prudential regulation on the financial health of deposit taking savings and credit cooperatives in Kenya. The specific objectives were to establish the effect of asset quality on financial heath; to establish the effect of capital adequacy on financial health; to determine the effect of liquidity on financial health and to determine the moderation effect of technical efficiency on the relationship between prudential regulation and financial health of deposit taking savings and credit cooperatives in Kenya. The study was guided by Financial Instability Hypothesis, Disruptive Innovation Theory, Shareholders Theory, Capital Buffer theory, Information Asymmetry Theory, Liquidity Shiftability Theory and Efficiency Structure Theory. The study inclined toward positivism philosophy and adopted explanatory research design. Secondary data for period 2018 to 2022 were collected using data extraction sheets. The target population was one hundred and seventy-six while the sample size was one hundred and fifty-nine, derived by utilizing inclusion exclusion criteria. Data was analyzed using STATA, where both descriptive statistics and inferential analysis were conducted. Diagnostic tests carried out included the test of normality, heteroskedasticity, multicollinearity, autocorrelation, stationarity and the Hausman test. Descriptive statistics summarised the panel data in terms of means, standard deviations, maximum and minimum figures. Inferential analysis carried out regression analysis and tested hypotheses to draw conclusion. Results from data analysis were presented in tables and figures. Results showed that asset quality had mean value of 0.1163,6 a p-value of 0.000 and a beta value of -0.08680, implying that asset quality has significant effect on financial health. On the other hand, capital adequacy had mean value of 0.2256, a p-value of 0.000, with a beta coefficient of 0.02924, implying that capital adequacy has significant effect on financial health. Liquidity had mean value of 0.2263, a p-value of 0.013, with a beta coefficient of 0.002548, implying that liquidity has significant effect on financial health. Technical efficiency was found to have no significant moderating effect on the relationship between prudential regulation and financial health. From the findings, the study recommends these institutions to strategically restructure their credit policies as per the main sector from which they draw their membership from, to contain the surge of non-performing loans. Again, they should constantly evaluate their capital requirements and adjust their capital levels according to their plans to ensure that the capital levels always comply with the set regulatory requirements. Moreover, they should monitor their cash flows and maintain a liquidity buffer. Management of the institutions can utilise the findings to intensify and optimize the utilization of available resources, while the government and the regulator can utilise these findings for policy formulation in order to improve the financial health of the deposit taking savings and credit cooperatives in Kenya. Additionally, the management of related financial institutions carrying out deposit taking business can exploit these findings to formulate policies and promote the financial health of their institutions.