Ethnic Diversity and Financial Performance of Deposit-Taking Savings and Credit Co-Operative Societies in Nairobi County, Kenya

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Date
2021
Authors
Otieno, Owalo Maurice
Ndede, Frederick
Atheru, Gerald
Journal Title
Journal ISSN
Volume Title
Publisher
CSRC
Abstract
Purpose: The DT-SACCOs have proved to be important in the development and growth of both individuals and economies. However, the overall financial performance of DT-SACCOs in Kenya has not been impressive. Between 2014 and 2018, there was general decline in return on assets and return on equity of DT-SACCOs. The average return on assets was 2.51% in 2014 and 2.25% in 2018. The average return on equity was 33.09% in 2014 and 21.89% in 2018. The study examined the effect of ethnic diversity on financial performance of Deposit-Taking Savings and Credit Cooperative Societies in Nairobi County. Design/Methodology/Approach: Agency theory, stakeholder theory and resource dependence theory guided this study. Explanatory and correlational research designs were used. Descriptive and inferential analysis was conducted. Findings: Ethnic diversity was found to insignificantly predict return on assets (β2 = -.158; p > 0.05) and return on equity (β2 = - .800; p > 0.05). Implications/Originality/Value: The study concluded that ethnic diversity of board members negatively and insignificantly affects financial performance.
Description
A Research Article in the Journal of Accounting and Finance in Emerging Economies
Keywords
Ethnic Diversity, Financial Performance, DepositTaking, Kenya,, Nairobi County
Citation
Otieno, O. M., Ndede, F. and Atheru, G. (2021). Ethnic Diversity and Financial Performance of Deposit-Taking Savings and Credit Co-Operative Societies in Nairobi County, Kenya. Journal of Accounting and Finance in Emerging Economies, 7(4), 991-1001.