Financial Risk Management Strategies Employed by Licensed Deposit Taking Saccos in Nairobi County
Nthimba, A. N.
Jagongo, A. O.
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With increased growth in deposit taking SACCOs in the past few years in terms of membership and deposits, they have been exposed to more financial risks. To survive the risks, they have to manage risks through various ways. Previous studies done on this area focus on management of risk using specific tools but none addresses the financial strategies employed by SACCOs in totality which is the gap that this study seeks to fill. This study examined financial risk management strategies employed by licensed deposit taking SACCOs in Nairobi County. The specific objectives were to find out whether deposit taking SACCOs employ active oversight board, financial risk management information systems, policies, procedures & limits, risk measurements and monitoring and comprehensive internal controls strategies in financial risk management. The study focused on all 44 deposit taking SACCOs. The population of interest was the risk managers or managing directors of the organizations. The research instrument used was questionnaires which were pre-tested to confirm clarity of the questions and their validity and reliability. Data was analyzed using quantitative techniques and then presented using distribution tables. The results revealed that most deposit taking SACCOs employ the strategies of active oversight board, policies, procedures and limits and comprehensive internal controls in financial risk management. The study concluded that SASRA needs to sensitize and educate members on proper financial risk management strategies to be employed by all deposit taking SACCOs and a more so a working management information system.