Micro Finance Services and Financial Performance of Deposit Taking Saccos in Nairobi City County, Kenya
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Date
2025-09
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Kenyatta University
Abstract
DT SACCOs are financial institutions which offer microfinance services to their members
and as a result pivotal contribution towards poverty eradication and creation of jobs arises.
However, the conceptual linkage between micro finance services they offer to their
members and the fluctuating financial performance is still controversial. The academic
focus of the current investigation was to interrogate the degree to which micro finance
services influence financial performance of those DT-SACCOs carrying out their ordinary
business activities in the County of Nairobi City Kenya. Specifically, it aimed to determine
the effect of micro credit on financial performance of DT-SACCOs in Nairobi City County,
Kenya, to evaluate the effect of micro savings on financial performance of DT-SACCOs
in Nairobi City County, Kenya and to examine the effect of micro insurance on financial
performance of DT-SACCOs in Nairobi City County, Kenya. Finance growth nexus
theory, microfinance theory and bank-led theory are the three key suppositions
underpinning the current investigation. Since the populace was made up of 42 DT
SACCOs operating in the City of Nairobi, located in Nairobi County, survey approach was
be relied upon by the researcher when collecting the necessary data. Questionnaires were
the tools dropped and picked by the researcher after they were duly filed. The unit of
observation was the corresponding 42 top management members of each SACCO
aforementioned. A data collection schedule was most appropriate and was used for
collecting the secondary data. Descriptive, correlational and inferential data analysis were
performed after the diagnostic test was completed. The key research findings were as
follows, micro credit influenced financial performance which was statistically significant
and of direct nature. For micro savings there was direct influence on financial performance
and for the case of micro insurance, there was statistically significant adjustment of
financial performance, which was direct. The management group of DT-SACCOs
domiciled in the Nairobi City County, Kenya will benefit from the research findings for
well-informed decision making will be much in order as far as financial performance
improvement is concerned. The point here is that those financial institutions will be able to
project the profitability in future with micro credit, micro savings and micro insurance
which they are aware of their prediction power when considered as a composite score and
not each in isolation. SASRA which is a government arm will benefit from the research
findings for it will establish user friendly policies which factor in techno innovation for
more job creation. In the academic frontier the empirical results act as a cornerstone to
guide them on identifying the other relevant contextually researchable areas. That is the
outcome depicts the philosophical linkage between other micro finance services and
profitability where by other unit of analysis such as commercial banks, Microfinance Banks
which are financial institutions can be brought to research books. Therefore, more suitable
empirical models may be created by factoring other micro finance service aspects which
significantly address each financial institution.
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 (Finance Option) of Kenyatta University. September, 2025
Supervisor
Geoffrey Mbuva