Effect of Organizational Strategic Resources on the Performance of Deposit Taking SACCOS in Kenya

Abstract

Deposit taking SACCOs significantly impact on growth and development of the Kenyan economy. Despite having various strategic resources DT SACCOs in Kenya are still experiencing poor performance in terms of returns on investments, customer satisfaction and efficiency in service delivery. The general objective of this study was to examine what effect organizational strategic resources have on the performance of deposit taking SACCOs in Kenya. The specific objectives of this study were to: assess the effect of financial resources on the performance of deposit taking SACCOs in Kenya; determine the effect of human capital on the performance of deposit taking SACCOs in Kenya; establish how technological resources affect the deposit taking SACCOs in Kenya; examine the effect of physical resources on the performance of deposit taking SACCOs in Kenya; and evaluate the moderating effect of firm size on the relationship between organizational strategic resources and performance of deposit taking SACCOs in Kenya. This study used a descriptive explanatory research design and pragmatic research paradigm. The key respondents included finance, human resource, ICT managers and chief accountants in the selected 84 deposit taking SACCOs in five Counties in Kenya. The study used purposive sampling and stratified random sampling method to select 184 managers from the target population. Semi structured questionnaire was employed to collect primary data while secondary data for the study was collected using data extraction tools. Quantitative data analysis was done using inferential and descriptive statistics. Descriptive statistics included percentages, frequency distribution, mean, and standard deviation. Multiple regression analysis and univariate regression analysis were employed for analysis of inferential data. SPSS software was used in the analysis. This study found that human capital has positive and significant effect on the performance of deposit taking SACCOs in Kenya (r2=0.190, p-value=0.000). In addition, the study also established that financial resources have positive and significant effect on the performance of deposit taking SACCOs in Kenya (r2=0.131, p-value=0.000). Further, the study revealed that technological resources have a positive and statistically significant effect on the performance of deposit taking SACCOs in Kenya (r2=0.089, p-value=0.000). Also, the study revealed that physical resources have a positive and statistically significant effect on the performance of deposit taking SACCOs in Kenya (r2=0.0153, p-value=0.000). The study also found that firm size has a significant moderating effect on the relationship between organizational strategic resources and performance of deposit taking SACCOs in Kenya. The study concludes that organizational resources have a positive and significant effect on performance of deposit taking SACCOs in Kenya. The study recommends that budgets and budget reviews should be carried out and approved on a timely basis to facilitate regular release of finances by the finance managers to ensure smooth and efficient service delivery. Further, SACCOS should extend incentives to their members and customers to increase their savings and deposits with them. Similarly policy makers should look into ways of boosting SACCOs’ asset and membership by encouraging Sacco mergers and even acquisitions.