Influence of Corporate Growth Strategies on Performance of Savings and Credit Cooperative Societies in Nyeri County, Kenya
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Date
2017-04
Authors
Waituika, Kennedy Kamau
Journal Title
Journal ISSN
Volume Title
Publisher
Kenyatta University
Abstract
The Sacco sub-sector in Kenya has been identified by The World Council of Credit
Unions (WOCCU) as the fastest growing in the World. The SACCO Societies
Regulatory Authority (SASRA) adds that the sub-sector continues to play a pivotal
role in the realization of vision 2030 of mobilizing savings for Kenya’s investment
needs. With the intense growth of the sector, the SACCO subsector operates in a
context of intense competition. As such, the sector players continuously engage in
measures to sustain their growth momentum to ensure they survive. The study sought
to determine the influence of Corporate Growth strategies on the performance of
SACCOs in Nyeri County of Kenya. Specifically, the study aimed to establish the
effect of Market Penetration, Product Development, Market Development and
Diversification strategies on the performance of SACCO’s. Performance indication
embraced a number of perspectives for better comparisons. The researcher used
outreach performance (Membership Volume), Market based measures (Market share)
and Accounting Based measures (ROA). A Census study technique was used to select
all the 15 active SACCOs in the sub county as gathered from the Directorate of Cooperative
Development of Nyeri County Government. The study was interested with
financial performance of the SACCOs for 4 financial years 2012/2013-2014/2015.
The study used both primary and secondary data resources. Primary data was
collected using questionnaires. The instrument was tested for validity and reliability
using expert opinion and using SPSS derived Cronbach’s Alpha. The study also
utilised secondary data which was gathered from the Annual financial Statement and
reports of the SACCOS. The study used SPSS to generate both descriptive and
inferential statistics. As explained by R square, which is the Coefficient of
Determination, 78.90% of the variation in the Performance of SACCOs (the
dependent variable) was explained by variability in the independent variables, that is,
Product Development, Market Development, Market Penetration and Diversification.
The study established that corporate growth strategies influence the performance of
SACCOs. Regression results established that all the corporate growth strategies were
significant determinants of performance. Correlation analysis results indicated that
Product Development has a very strong positive relationship with performance. The
association between either market development or market penetration with
performance was strong and positive while diversification demonstrated a moderate,
positive association with performance. The study therefore recommended investment
in corporate growth strategies with a special emphasis on product development as an
intensive strategy for the growth of the SACCOs.
Description
A Research Project Submitted to the School of Business in Partial Fulfillment for the Award of Degree of Master of Business Administration in Strategic Management of Kenyatta University