Sharia-compliant sacco services and financial performance of small and medium-sized enterprises in Nairobi city county, Kenya.
Sheikh, Adow Mohamed
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Saving and Credit Cooperative societies (SACCOs) are basis of monetary provisions helping entrepreneurs and other upcoming industries connect to banking facilities and other services. They provide monetary provisions to low-income earners who are self-employed. On the other hand, sharia-compliant SACCOs have obtained considerable importance in the modern globe on the foundation of stipulation of loans without interest together with the sharing of losses and profits via the doctrine of profit-sharing (Mudharaba) and joint- venture (Musyaraka). Although numerous researches have been done on areas of Islamic banking, few researches have explored the role of sharia-compliant SACCOs on SMEs in Kenya. Therefore, the motive of this study was to explore the effect of sharia-compliant SACCO services and monetary achievements of SMEs. The survey was to be informed by four objectives namely; to decide the effect of loan services, training services, banking services and saving services by sharia-compliant SACCOs on monetary recital of SMEs in Nairobi city county, Kenya, The survey was to be based on three conjectures namely; financial intermediation theory, credit access theory and the saving culture theory. The project has utilized an evocative research plan in establishing the effect of sharia-compliant SACCO services and monetary recital of SMEs. The target populace was 300 SMEs who are clienteles of sharia-compliant SACCOs. Utilizing cluster sampling, the survey has adopted a total of 90 participants from the SME proprietors. The survey collected primary data utilizing closed questionnaires as the research instrument. The data was obtained by using plunge and single out technique and followed it by way of calling. The collected data was summarized, coded, tabulated and analyzed using SPSS. The study derived the mean, frequencies and percentages for each variable. Findings of the survey were obtained by use of charts, histograms and bar graphs where appropriate. The results of the survey are believed to add up to existing framework of knowledge in the field of SMEs business development as well as in Islamic banking in Kenya. The relationships between SACCO services and monetary recital of SMEs was established through use of regression analysis. The survey concludes the services provided by sharia-compliant SACCOs have significantly enhanced the monetary recital of SMEs in Nairobi City County. The study recommends sharia-complaint SACCOs and other financial institutions to do frequent trainings for SME owners so as to solidify their capacity, skills and knowledge.