Financial Risk Management Practices and Asset Quality of Deposit Taking Saccos in Nyeri County, Kenya
| dc.contributor.author | Njuguna, Sarah Wambui | |
| dc.contributor.author | Gitagia, Francis | |
| dc.date.accessioned | 2025-10-01T12:05:38Z | |
| dc.date.available | 2025-10-01T12:05:38Z | |
| dc.date.issued | 2025-09 | |
| dc.description | Article | |
| dc.description.abstract | The sustainability of deposit-taking SACCOs depends on asset quality since it directly affects their financial situation, stability, and capacity to properly control risks, therefore ensuring long-term survival. SACCOs nationally have battled changing asset quality with non-performing loans ranging from 1.98 percent to 2.4 percent between 2019 and 2023. Asset quality in Nyeri County has been even lower, ranging from -1.4 percentage to 3.5 percent, so stressing more difficult maintenance of financial stability than national norms. The research to determine the effect of; liquidity risk management practices on asset quality of deposit taking SACCOs in Nyeri County, Kenya. The time scope of the study was the period between 2019-2023. The study was informed by the Liquidity Preference Theory. The research used descriptive research design. The unit of analysis was 11 deposit-taking SACCOs in Nyeri County. The unit of observation was operations Managers, credit Managers and risk management Managers of each of the SACCOs. The study utilized census to select a sample of 33 selected managers. The study employed both primary and secondary data. Primary data was collected through a questionnaire while secondary data was obtained utilizing data collection sheet. Various diagnostic tests were carried out including. The tool of analysis was Statistical Package of Social Sciences Version 24. Both descriptive and inferential statistics were employed to analyze the data. Descriptive statistics utilized percentages, frequencies, measures of central tendencies (mean) and measures of dispersion (standard deviation) while inferential analysis involved use of correlational analysis and panel regression analysis. Data was displayed tables and graphs. The research found that effective management of liquidity ensures that SACCOs may meet their short-term financial obligations, manage withdrawal requests, and avoid liquidity shortages that can cause financial instability. Preserving asset quality and preventing defaults depend on this approach. The research concluded that the financial risk management policies in Nyeri County, Kenya, had poor quality more especially, SACCO asset quality is affected by effective strategies of financial risk management including liquidity risk management, strategic risk management, interest rate risk management. The research recommends that implementing best practices in liquidity risk management would allow SACCOs to ensure they can satisfy their financial obligations and avert liquidity difficulties. Regulatory bodies like SASRA should also set and apply risk management requirements more aggressively. | |
| dc.identifier.citation | Njuguna, S. W., Gitagia, F. (2025). Financial risk management practices and asset quality of deposit taking SACCO’s in Nyeri County, Kenya. International Academic Journal of Economics and Finance (IAJEF) | ISSN 2518-2366, 5(1), 296-310. | |
| dc.identifier.uri | https://iajournals.org/articles/iajef_v5_i1_296_310.pdf | |
| dc.identifier.uri | https://ir-library.ku.ac.ke/handle/123456789/31487 | |
| dc.language.iso | en | |
| dc.publisher | International Academic Journal of Economics and Finance (IAJEF) | |
| dc.title | Financial Risk Management Practices and Asset Quality of Deposit Taking Saccos in Nyeri County, Kenya | |
| dc.type | Article |