| dc.description.abstract | Saccos are beneficial since they inject capital to the economy through various individuals,
corporates and other institutions finances to pay back later at an agreed interest.
Nevertheless, Saccos have been operating under declining profitability in Kenya.
Therefore, the purpose of the study was to investigate the effect of innovation on financial
performance of deposit taking saccos in Laikipia County, Kenya. Further, the specific
objectives were to examine the effect of product innovation, process innovation,
institutional innovation and policy innovation on financial performance. Additionally, the
study was guided by three theories which are Credit creation theory, The Unified Theory
of Acceptance and Use of Technology [UTAUT], and Resource-based view theory. Further
on, the study used descriptive research design to collect data from nine deposit taking
Saccos in Laikipia County. Specifically, the target population were 118 respondents who
included 22 departmental managers and 96 support staff selected using census method.
Notably, the study collected both primary and secondary data whereby primary data was
collected in form of questionnaires from departmental managers and support staff.
Secondary data was collected from financial reports such as income statement, whereby
various financial ratios such as return on assets, return on equity, gross profit, net profit,
liquidity ratio were noted. Further, the study conducted a pilot study in Bingwa and Nufaika
Saccos in Kirinyaga County whose 2 departmental managers and 10 support staff took part
in the piloting. The study sampled the piloting managers and staff through obtaining 10%
of from the sample size. The study also measured reliability using Cronbach Alpha
Coefficient method while face, content and construct types of validity were measured.
Further, SPSS software version 24 was used to analyze and generate various statistical
reports whereby, in the analysis of the questionnaire, the study examined and generated
descriptive statistics such as frequency, percentage and mean. Additionally, the study
generated various linear regression statistics such as model summary and ANOVA of each
independent variable. Thereafter the study generated inferential statistics to test the general
model. The study found out that the desired number of clients was not yet achieved due to
bombastic requirements and processes when opening accounts or accessing loan products;
The Sacco’s bid to incorporate ICT to assist in financial transaction such as having enough
servers and skilled staff was still low hence increased system downtimes; There were poor
management operations such that the process of coming up with new policies were either
poorly done or done with less involvement of the junior staff; and the management took
longer time when communicating to the staff on changes in policies on time. The study
thus recommends that; The management of the Saccos should consult risk management
professionals to further review on the requirements needed on each product and service the
Sacco offers; The Sacco management should invest in secure servers to protect client’s
information from unauthorized access or use; The Sacco management should restructure
the decision-making procedures and processes to see to it that at consultation stage, the
opinion of junior staff involved in operations is incorporated; and the Sacco management
should develop policies on the time frames on when changes in policies should be
communicated to staff | en_US |
