Projects Governance and Performance of Deposit-Taking Savings and Credit Cooperatives in Meru County, Kenya
Njeru, Zakary Gitonga
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Compliance challenges to the set business regulatory environment have been experienced in the management and performance of SACCOs projects. This has seen an increased desire by SACCOs to embrace corporate governance practices when they are carrying various marketing, capacity development, new product development and infrastructural projects. In Kenya, Savings and Credit Cooperatives Societies (SACCOs) are popular as forms of investment and mobilization of resources, this is because of their ability to bring about equitable development and justice. Despite these accolades, the Kenyan SACCOs have experienced mixed results as regulators have noted that they have not been meeting their members’ needs and requirements as well as failing to service loans extended to them by commercial banks and other international lenders. To ensure the objectives of enhancing shareholders value have been achieved, corporate governance comes into play. This therefore led to the main objective of the study which is to determine the effect of project governance factors on performance of Deposit Taking SACCOs in Meru County. Specifically, the study established the effect of internal controls, project management committee, transparency and disclosure, and risk management on the performance of projects instituted by deposit taking SACCOs in Meru County. The present study was premised on Agency theory, Stakeholder theory and Shareholders’ theory. Structured questionnaire were administered on the target population. The 11 Deposit-Taking SACCOs regulated by SASRA formed the study target population. The study adopted a descriptive research design and made use of a census in to establish the status of project governance. The study unit of analysis was the 11 deposit taking SACCOs while the unit of observation were board of directors, chief executive officers and finance and marketing managers of the SACCOs. The number of respondents involved in the census were 55. The study adopted descriptive and multiple ordinary least squares regression model. Study’s results showed that internal controls, project management committees and risk management practices had a positive and significant effect on the performance of the Deposit Taking SACCOs. The transparency and disclosure variable had a positive effect but it was not significant. The study recommended the integration of SACCOs departments using information technology for ease of communication and monitoring. This study was meant to benefit financial institutions especially on the relevance of observing project governance factors.