Risk Management Strategies and Performance of Non-withdrawable Deposit Taking Savings and Credit Societies in Nairobi City County, Kenya
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Date
2024-09
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Publisher
Kenyatta University
Abstract
Savings and Credit Cooperative Societies (SACCOS) provide savings and credit facilities to their members and like other organizations in the financial sector, it undergoes several economic challenges which threaten their growth. The non-withdrawable deposit taking Savings and Credit Cooperative Societies subsector have undergone performance failures leading to some collapsing, hence the necessity of a successful risk management plan in order to meet their goals. The specific objectives of this research were to determine the effect of risk avoidance, risk acceptance, risk reduction and risk transfer on performance of non-withdrawable deposit taking Savings and Credit Cooperative Societies in Nairobi County. Variables of analysis were the risk management strategies which included risk avoidance, reduction, acceptance, and transfer. The research was grounded on modern portfolio and agency theories. For this investigation, a descriptive research design was used and the target population constituted of 132 non-withdrawable deposit taking Savings and Credit Cooperative Societies in Nairobi County. A census method was employed to choose the Savings and Credit Cooperative Societies with a sample size of 132. The study had a total population of 132 respondents. Primary data was gathered by semi structured questionnaires, and secondary data came from documented information in regulatory bodies reports, journals, books amongst others. Research instruments were tested for validity and reliability. Descriptive and inferential statistics were used in the study to analyse the data. During the entire study, ethical considerations was adhered to. The results of the investigation demonstrated that risk acceptance and risk avoidance have a positive relationship with performance and a significant effect. Similarly, the findings showed that risk reduction was negatively significant in predicting the performance of non-withdrawable Savings and Credit Cooperative Societies. However, the study revealed that risk transfer was slightly insignificant in forecasting the effectiveness of non-withdrawable deposit taking Savings and Credit Cooperative Societies at 95% confidence level. Therefore, the investigation concluded that risk avoidance, risk acceptance, and risk reduction are key risk management strategies that may affect how the non-withdrawable deposit taking Savings and Credit Cooperative Societies in Nairobi city perform. Additionally, risk transfer does not significantly impact performance of non-withdrawable deposit taking Savings and Credit Cooperative Societies in Nairobi City. The study recommends that researchers can further explore and expand upon the findings of this investigation to better understand the connection between risk management strategies, and the performance of non-withdrawable deposit taking Savings and Credit Cooperative Societies in other counties and other financial institutions.
Description
A Research Project Submitted to the School of Business, Economics and Tourism in Partial Fulfilment for the Award of Degree in Master of Business Administration (Strategic Management) Kenyatta University, September 2024.
Supervisor
Ann Muchemi