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

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Date
2021Auteur
Otieno, Owalo Maurice
Ndede, Frederick
Atheru, Gerald
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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.