Relationship between Resource Mobilization and Wealth Maximization in Saving and Credit Cooperative Societies in Meru County, Kenya

Abstract

Saving and Credit Cooperative Societies in Kenya face challenges in terms of resource mobilization, including strict requirements/bureaucracy, inadequate government support, legal restrictions, default risks/poor repayment, inadequate lending funds, and the lack of adequate legal framework. This study's overall objective was to investigate the relationship between resource mobilization and wealth maximization in Meru County saving and credit cooperative societies. The specific objectives were; to assess the influence of savings strategy, product development, ICT adoption and staff development process on SACCOs wealth maximization n Meru County. The study was informed by four theories; dynamic capability theory; resource-based theory and human capital theory. It adopted descriptive research design and targeted 11 deposit taking SACCOs in Meru County. The unit of observation comprised of 168 loan officers, 17 IT systems administrator and 20 managers from all the SACCOs. A sample size of 155 was obtained from a total target population of 205 respondents. The study adopted stratified sampling method which ensured proper representation of the different study respondents. Using structured questionnaires, primary data was collected. SPSS version 24.0 was used to analyze data collected using descriptive statistics (frequency, percentage, mean and standard deviation) and inferential statistics (analysis of correlation and regression). The findings indicated that separately, all the resource mobilization aspects (savings strategy, product development, ICT adoption and staff development process) positively and significantly influence SACCOs’ wealth maximization. When combined staff development process had a negative and significant influence on wealth maximization. However, product development was found to have no significant influence on wealth maximization. The research concluded that resource mobilization aspects, specifically, savings strategy and ICT adoption have a positive and significant influence on SACCOs’ wealth maximization in Meru County, Kenya. Based on the findings, the research recommends that SACCOs in Meru County need to strengthen their resource mobilization strategies; savings strategy through attraction of new members, interest rates on deposits, use of lotteries, continued savings arrangements and use of liquid products; product development through new types of products, quality of products, products features, product research and number of products; ICT adoption through use of mobile transaction, availability of internet and training staff on technical skills and agency banking; and staff development process through skilled human resource, decision making, staff trainings and organization of workshops and conferences aimed at enhancing staff skills. The findings have significant implications on resource mobilization strategies among SACCOs not only in Meru but also in other parts of the country. Particularly, the findings inform the direction that these SACCOs should take in order to achieve wealth maximization.