Assessment of savings and credit co-operative societies’ financial services on growth of micro, small and medium enterprise in Uasin Gishu county; A case study of Imarisha Sacco

Abstract

This study investigated the effect of savings and credit co-operative societies (SACCOs) services on the growth of micro, small, and medium enterprises (MSMEs) in Uasin Gishu County. The research focused on four main objectives: assessing the effect of lending services, examining the effect of investment services, establishing the effect of risk assessment services, and evaluating the effect of financial training services on MSME growth. The study was grounded in four theories, namely Financial Intermediation Theory, Growth of Wealth Theory, Human Capital Theory, and Hybrid Theory. The target population included 2000 licensed MSMEs operating financial accounts with Imarisha SACCO Eldoret branch in Uasin Gishu County. The unit of analysis comprised registered MSMEs, with proprietors as the unit of observation. A stratified sampling technique was employed to ensure a comprehensive and unbiased representation of the population, with proportional representation from various clusters. The sample size was determined using Yamane's formula, allowing for thorough data analysis. Data collection involved questionnaires with both open and closed-ended questions, utilizing a 5-point Likert scale to measure respondents' satisfaction levels. Data analysis was conducted using SPSS version 26, employing descriptive statistics to show central tendencies, Pearson correlation coefficients to determine linear relationships, and F-tests and T-tests to establish the probability of relationships. The study utilized correlation and multiple regression analyses to evaluate the relationships between various variables, with a confidence level of 95% and a significance level of 0.05 considered during the analysis, ensuring statistical validity. From the findings, it was established that SACCO services significantly impacted the growth of MSMEs in Uasin Gishu County. The study revealed strong correlations between various SACCO services and MSME growth, with lending services showing a correlation coefficient of r=0.634, indicating a robust positive relationship. Investment services had a moderate correlation of r=0.300, while risk assessment services and financial training services demonstrated positive correlations of r=0.410 and r=0.425, respectively. These findings suggested that effective lending and investment strategies were crucial for fostering business expansion, alongside the need for robust risk management and financial training to enhance operational resilience. Based on these insights, recommendations were made to improve the accessibility and simplicity of loan application procedures, increase financial literacy training, and promote tailored investment strategies that address the unique needs of MSMEs. These measures aimed to ensure that SACCOs effectively supported the sustainable growth of local enterprises, ultimately contributing to the economic development of the region