Tarus, Carolyne2025-04-032025-04-032024https://ir-library.ku.ac.ke/handle/123456789/29904Project Submitted To the School of Business, Economics and Tourism in Partial Fulfilment for the Award of Degree in Master of Business Administration (Finance Option) Kenyatta University, 2024. Supervisor Eddie SimiyuIn Kenya, DT-SACCOs have been facing certain problems that have had disastrous effect to their financial performance characterised declining return on assets. Although literature has associated financial performance with financial characteristics, extant empirical research works suffer from conceptual and contextual gaps. This motivated the current research to assess SACCO based financial characteristics as a suitable tool for spurring financial performance of Kenya DT-SACCOs. The specific objectives were to; establish the effect of capital adequacy, asset quality, financial investments, and liquidity on financial performance of Savings and Deposit Taking credit co-operative societies in Kenya. The study further assessed the moderating effect of SASRA regulation on relationship between SACCO based financial characteristics and financial performance of Deposit Taking Savings and credit co-operative societies in Kenya. The theories that were useful for underpinning the study concept will include; financial intermediation theory, pecking order of capitalization, financial growth theory, bad management hypothesis, liquidity premium theory. In the analysis, descriptive research design was adopted in this study, which was carried out in Nairobi city County, Kenya. The 190 DT-SACCOs were the study's target population. The study used purposive sampling; the inclusion criteria include Kenya DT SACCOs that had been in existence since 2016. Data was gathered for this study using secondary data for period between 2018 to 2023 on a data collection tool developed by the researcher. In order to produce both descriptive and inferential statistics, the study analysed the data using quantitative approach. The research estimated a direct model on the association between the variables using panel regression. It also evaluated how SASRA risk regulations moderated the relationship between SACCO based financial characteristics and financial performance of DT-SACCOS in Kenya. The autocorrelation, multicollinearity and heteroscedasticity, normality, fixed and random effects were tested for. The Hausman test was adopted in the research investigation to determine the form of outcome as either being fixed or random. The study came to the following conclusions: capital adequacy had statistically significant positive effect on financial performance, asset quality had statistically significant negative effect on financial performance. While financial investments had statistically significant negative effect on financial performance, liquidity had positive association with financial performance of Kenyan DT-SACCOs. SASRA risk regulations. The association between SACCO based financial characteristics and financial performance is thus found to be significantly moderated by SASRA risk regulations. In accordance to those findings, this research recommends that DT-SACCOs in Kenya ought to keep the capital adequacy at the optimal institutional capital value, practise careful asset quality management and regularly monitor loan management in order to build sound lending policies optimise their financial investments by boosting sufficient funding of operational expenses, and maintain the suggested quantities of liquidity. They ought to conduct safe handling of assets and closely keep track of the oversight of loans for the creation of reasonable lending recommendations that do not negatively impact the business.enThesis