Board Diversity and Financial Performance of Deposit-Taking Savings and Credit Co-Operative Societies in Nairobi City County, Kenya

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dc.contributor.advisorFredrick W.S. Ndedeen_US
dc.contributor.authorMaurice, Owalo Otieno
dc.date.accessioned2022-09-15T07:06:19Z
dc.date.available2022-09-15T07:06:19Z
dc.date.issued2022
dc.descriptionA Thesis Submitted to the School Of Business in Partial Fulfillment of the Requirements for The Award of the Degree of Master Of Science in Finance, Kenyatta University.en_US
dc.description.abstractThe Deposit-Taking Savings and Credit Cooperative Societies have proved to be important for the development and growth of both individuals and economies. Since the enactment of Sacco Societies Regulatory Authority in 2010, the Deposit-Taking Savings and Credit Cooperative Societies have realized a vibrant culture of small-scale savings and loaning among local people in the country. However, the overall financial performance of Deposit-Taking Savings and Credit Cooperative Societies in Kenya has not been impressive despite the contribution that these financial institutions make to the economy. Between 2014 and 2018, there was general decline in return on assets and return on equity of Deposit-Taking Savings and Credit Cooperative Societies. The average return on assets was 2.51% in 2014 and 2.25% in 2018. The average return on equity was 33.09% in 2014 and 21.89% in 2018. The study specifically examined the effect of level of education, ethnic diversity, gender diversity and professional skill mix on financial performance of Deposit-Taking Savings and Credit Cooperative Societies in Nairobi City County. The guiding theories included agency, stakeholders, resource dependence and human capital theories. The study adopted positivism research philosophy, explanatory research design, and adopted census in collecting data in the 42 registered Deposit-Taking Savings and Credit Cooperative Societies in Nairobi City County. The respondents were the chief executive officers. Both primary and secondary data was collected. Primary data was collected using semi-structured questionnaires. Descriptive statistics included frequencies, percentages, means and standard deviations. Inferential analysis conducted included Pearson product-moment correlation and multiple regression analysis. It was noted that level of education significantly predicts return on assets (β1 = -.804; p < 0.05) and insignificantly predicts return on equity (β1 = -3.336; p > 0.05). Ethnic diversity insignificantly predicts return on assets (β2 = -.158; p > 0.05) and return on equity (β2 = -.800; p > 0.05). The study established that gender diversity insignificantly predicts return on assets (β3 = 0.456; p > 0.05) and significantly predicts return on equity (β3 = 7.534; p < 0.1). It was shown that professional skill mix insignificantly predicts return on assets (β4 = -.010; p > 0.05) and return on equity (β4 = 0.482; p > 0.05). Sacco Societies Regulatory Authority regulations insignificantly moderates the relationship between board diversity and financial performance. It was concluded that level of education of the board members negatively and significantly affects return on assets. The study concluded that ethnic diversity of board members negatively and insignificantly affects financial performance. It was also concluded that gender diversity of board members positively and significantly affects return on equity. It was concluded that professional skill mix of the board members insignificantly affects financial performance. The researcher concluded that Sacco Societies Regulatory Authority regulations insignificantly moderates the relationship between board diversity and financial performance. It is recommended that the directors and management of Savings and Credit Cooperative Societies should have wide variety of knowledge and skills relevant for running their businesses, ethnic diversity of board members should be enhanced to increase the chances of getting directors from across the regions of Kenya with expertise, gender diversity of board members should be increased to ensure balanced participation of all genders in Savings and Credit Cooperative Societies management, professional skill mix of the board members should be enhanced and Sacco Societies Regulatory Authority regulations should be adhered to by the Savings and Credit Cooperative Societies.en_US
dc.description.sponsorshipKenyatta Universityen_US
dc.identifier.urihttp://ir-library.ku.ac.ke/handle/123456789/24211
dc.language.isoenen_US
dc.publisherKenyatta Universityen_US
dc.subjectBoard Diversityen_US
dc.subjectFinancial Performanceen_US
dc.subjectDeposit-Takingen_US
dc.subjectSavings and Crediten_US
dc.subjectCo-Operative Societiesen_US
dc.subjectNairobi Countyen_US
dc.subjectKenyaen_US
dc.titleBoard Diversity and Financial Performance of Deposit-Taking Savings and Credit Co-Operative Societies in Nairobi City County, Kenyaen_US
dc.typeThesisen_US
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