Effect of Financial Empowerment on Member Advancement of Licensed Deposit Taking Saccos in Nairobi City County, Kenya

Abstract

This thesis examined the effect of financial empowerment on member advancement of licensed deposit taking Saccos in Nairobi city County, Kenya. The thesis objectives were; to examine the effect of accessing financial services on member advancement, to evaluate the effect of credit portfolio administration on member advancement, to assess the effect of risk management on member advancement and to explore the effect of voluntary savings on member advancement of licensed deposit taking Saccos in Nairobi city County, Kenya. The thesis adopted a descriptive cross sectional survey design, where both quantitative and qualitative approaches were applied. Semi structured questionnaires and interview guide were used in data collection. Email (internet) and drop and pick methods were also used. Collected data was organized according to the research objectives and hypotheses using statistical package software for social sciences(SPSS).The sample had 39 respondents out of a population frame of 42 participating licensed deposit taking Saccos in Nairobi city county. They comprised of the chief executive officers, the deputies and the departmental heads from the sampled licensed deposit taking Saccos. A pilot test was conducted in Kiambu county on a sample of 5 deposit taking Saccos who were not included in the final study sample. Cronbach Alpha test of 0.841 was obtained indicating the reliability of the research instrument. Content and criterion validity were ensured through incorporating the experts’ suggestions in the final document. Data was analyzed using descriptive and inferential statistics which included correlation analysis, and multiple regression analysis after testing for normality, multicollinearity and performing factor analysis. The study findings established a strong positive correlation between financial services and member advancement, a strong positive significant correlation was found between credit portfolio administration and member advancement, a strong positive significant relationship between risk management and member advancement, and a strong positive significant relationship between voluntary savings and member advancement of the licensed deposit taking Saccos in Nairobi city county. On combination of the four determinants, a strong positive significant correlation was established between the determinants and dependent variable (Member advancement). This indicated that the determinants influenced Member advancement to a greater extent when combined. On introduction of Regulatory environment the influence on the Member advancement was enhanced. Further, the arrangement of the determinants according to their effect on Member advancement indicated that, risk management had more effect on Member advancement followed by credit portfolio administration, voluntary savings and financial services. I recommend the licensed deposit taking Saccos to adopt these findings since they enhance their liquidity position and ensure sustained credit lending. Further study should be conducted to establish other financial factors that affect financial empowerment on Member advancement of the licensed deposit taking Saccos in Nairobi city county, Kenya.