Integrated Financial Management Information System (IFMIS) and Credit Scoring in Cooperative Societies: A Survey of Deposit Taking Saccos in Nyeri County, Kenya
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Date
2015
Authors
Wangari, J. K.
Jagongo, A. O.
Journal Title
Journal ISSN
Volume Title
Publisher
Globeedu Group
Abstract
Financial management information systems are not a new phenomenon. On the contrary, the recording of financial information
is the oldest known form of record keeping, dating back thousands of years. Yet financial information has long presented
problems, particularly since the invention of money. Governments in developing countries are increasingly exploring methods
and systems to modernize and improve public financial management. In Kenya, majority of SACCOs are faced by several
obstacles in their managerial systems due to poor implementation of Integrated Financial Information Systems (IFIS) in their
institutions. From recent studies, it is revealed that most of the SACCOs in Nyeri County including their branches are using
traditional and old way in doing daily banking activities and also most of their systems and computers are old and without
advanced software and new computer applications. The purpose of the study was to determine the effect of integrated financial
management information system on credit scoring among SACCOS in Nyeri. The study adopted a descriptive survey research.
The population for this study comprised 30 respondents who included the manager and the head of IT department in each of the
15 deposit taking SACCOs in Nyeri County. Since the population is not large, the study adopted a census approach by including
all the 30 respondents in the sample. Data involved primary data and secondary data which were collected by use of
questionnaires that were self-administered. Data were analyzed using descriptive analysis by use of Statistical Package for
Social Sciences (SPSS V 21.0). In addition, multiple regressions were used to measure the strength of the relationship between
the dependent and independent variables. Frequency tables and graphs were used to present the data for easy comparison. This
study found that internal control mechanism facilitated by IFMIS affects credit scoring among SACCOs in Nyeri to a great
extent. The study further found that organizational structure and resources affect credit scoring among SACCOs in Nyeri to a
great extent. From the findings, the study concludes that internal control mechanism facilitated by IFMIS affects credit scoring
among SACCOs in Nyeri. The study also concludes that information processing, information gathering, timeliness of information,
verification of the accuracy and completeness of transactions and transparency of information affect the credit scoring among
SACCOs in Nyeri County. The study further concludes that formalization, centralization, hierarchical arrangement of lines of
authority and number of hierarchical levels affect the credit scoring of SACCOs in Nyeri. The study recommends that the
SACCOs should ensure that the information flow is transparent and effective. This will help enhance confidence and credibility of
the operations of the SACCOs. Also the SACCOs will be able to monitor the information of clients and avoid falling into bad
debts. The study also recommends that SACCOs should ensure they put in place a proper strategy-structure alignment. This is
because changes in the competitive environment require adjustments to the organizational structure. In addition, the SACCOs
should realize that laxity in the realignment has a negative impact on financial performance.
Description
Research Article
Keywords
Credit scoring, Internal control, Information flow, Staff competence
Citation
International Journal of Innovative Research & Development Vol 4 Issue 13