Non-Remittance of Sacco Deductions and Financial Performance of Mentor Deposit Taking Sacco in Murang`A County, Kenya
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Date
0202-11
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International Academic Journal of Economics and Finance
Abstract
The research assessed the effects of Nonremittance of SACCO deductions and
financial performance of Mentor deposit
taking SACCO in Murang`a County,
Kenya. Savings and credit cooperatives are
organizations created by members to pool
resources for economic growth and offer
her members manageable loans and reward
them with dividends on their deposits.
Since the loanable funds are members’
contribution, the SACCO's operation may
be impacted by the non-remittance of the
monthly contributions. Determining the
impact of non-withdrawal deposits, loan
repayment, interest revenue, share capital,
and the risk premium on the financial
performance of the SACCOs was the
study's specific goal. Institutional theory,
credit risk theory, cash flow management
theory and loan pricing theory support
research variables since they show how
each variable behaves. The study adopted
the descriptive research design which was
suitable in making a conclusion of the
collected data of the three branches of
Mentor SACCO, in Murang'a County.
Systematic sampling design was used to
create a sample size of 391 members and
three branch credit officers where data
collection was done using both open and
enclosed questionnaires, and only 89% of
questionnaires were completed and
compiled for analysis, and a document
review guide was used in collecting
secondary data on financial performance
from the audited financial statement
provided by the SACCO chief executive
officer. To test the validity, the Cronbach’s
Alpha test was carried out on 10% of the
sample; the results showed 0.9 an
indication that, the tools were excellent for
data collection and Valid at a P<5%
showing a significance level for the test of
validity and Pearson correlation. The
financial ratios, Pearson correlation, and
correlation of coefficient were used to
determine the performance and also the
relationship between independent and
dependent variables. Statistically, it was
noted that non-remittance of loans had a
negative impact on the financial
performance shown by a 25% of loans
were not remitted in time thus the SACCO
did not attain efficiency ratio of 100% as
required by SASRA, and in the last five
years the SACCO had not attained a
current ratio of 2:1 as recommended, and
asset growth affected the liquidity of the
SACCO. The study recommends that the
SACCO finds a safer means of remittance,
vetting employers, and CRB should be
used to minimize default. The data was
presented in tables and figures. Since the
information provided would not be shared
with a third party, the respondents were
offered the assurance of anonymity and
secrecy
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Citation
Matei. M., Musau, S. (2022). Non-remittance of SACCO deductions and financial performance of mentor deposit taking SACCO in Murang`a County, Kenya. International Academic Journal of Economics and Finance, 3(8), 79-102.