Effect of financial management decisions on financial performance of selected nondeposit taking Saccos in Kiambu county, Kenya: theoretical review

Abstract

Savings and Credit Co-operatives societies`financial performance has not sufficiently compensated members on their investments leading to an outcry and dormancy in operations from the studies carried out on their financial performance .The financial management components have been seen to affect financial performance in Savings and Credit Co-operatives societies, especially on area of debt to equity mix, working capital and investment portfolios on financial performance .This paper offers a back ground on financial management decisions and financial performance. It provides an empirical and theoretical overview on the relationship that exists between financial management decisions and financial performance of SACCOs in Kenya .This paper concludes that financial management decisions on capital structure, working capital and investments are significant predictor of financial performance and that Gross Domestic Product affect both financial management decision and financial performance. This paper indicate a need to an empirical research to ascertain the exert relationship between the financial management decision and financial performance of SACCOs.