Thesis:

Factors influencing the organizational performance of deposit-taking saccos in Kisii county, Kenya

SACCOs are member-owned financial institutions offering a range of financial services aimed at promoting financial inclusion and empowering communities, particularly in underserved regions. In Kenya, SACCOs play a crucial role by providing savings and credit facilities, especially in remote areas where traditional banks are scarce. This research examined the factors influencing the organizational performance of deposittaking SACCOs in Kisii County, Kenya. The specific objectives included to determine how leadership and management practices influence the organizational performance of deposit-taking Saccos in Kisii County, to assess the influence of financial management practices on the organizational performance of deposit-taking Saccos in v Kisii County, to find out how human resource management practices influence the organizational performance of deposit-taking Saccos in Kisii County, and to examine the influence of technological adoption and innovation on the organizational performance of deposittaking Saccos in Kisii County. The study was guided by a theoretical framework encompassing Agency Theory, Resource Dependency Theory, Contingency Theory, and Motivation Theory. The study targeted the management teams and staff members of DTSACCOs in Kisii County, assessing organizational performance in terms of profitability, asset growth, loan portfolio quality, and member satisfaction. The entire accessible population of 130 respondents from management team members and staff members was surveyed using the census methodology. To verify the reliability and validity of the research instruments, a pilot study was conducted with five respondents from SACCOs in Nyamira County, not included in the main study. Reliability testing using Cronbach’s alpha coefficients confirmed that all constructs had values above 0.7, indicating strong internal consistency. Validity was established through expert reviews of the instruments, ensuring they effectively captured the constructs of interest and were suitable for measuring the targeted variables. Data collection utilized both structured and unstructured questionnaires, with analysis conducted through descriptive and inferential statistics. Results were double-checked for accuracy and reported using tables and charts, with findings transferred from SPSS v.27 to Microsoft Word for descriptive reporting. Based on regression coefficients, leadership and management practices demonstrated the greatest impact on SACCO performance (β = 0.398, p =0.000). Financial management practices, with a coefficient (β = 0.312, p = 0.000), showed the second most substantial impact. Human resource management practices (β = 0.221, p = 0.001) also positively influenced performance, contributing meaningfully, although less so than leadership and financial management practices. Lastly, technological adoption and innovation (β = 0.165, p = 0.011) had the lowest positive impact among the predictors, suggesting a moderate effect compared to other factors. Overall, the model explained 67.7% of the variance in SACCO performance (R² = 0.677), reflecting the combined impact of these factors. The study recommends continued investment in leadership development, improved transparency in recruitment, a focus on risk management within financial practices, and prioritizing technological infrastructure to enhance service delivery and operational efficiency. Future research should explore the long-term effects of specific leadership styles and technological advancements on SACCOs' financial sustainability and performance outcomes, providing further insights into best practices for organizational improvement in the sector.