MEMBERSHIP CHARACTERISTICS AND FINANCIAL PERFORMANCE OF SAVINGS AND CREDIT COOPERATIVE SOCIETIES IN KERICHO COUNTY, KENYA
Abstract
Savings and Credit Cooperative Societies (SACCOs) are member-owned financial institutions whose financial performance is closely connected to the characteristics and financial behaviour of their members. This study examined the influence of membership characteristics on the financial performance of SACCOs in Kericho County, Kenya. The study was anchored on Contingency Theory and Transaction Cost Theory, which explain how organizational arrangements can be aligned with environmental and member-related conditions while minimizing costs associated with coordination, monitoring and exchange. A correlational research design was adopted, targeting 121 employees from five registered SACCOs in Kericho County through a census approach. Primary data were collected using semi-structured questionnaires, with 111 usable responses representing a 91.7% response rate. Reliability coefficients were 0.732 for membership characteristics and 0.741 for financial performance. Data were analysed using descriptive statistics, Pearson product-moment correlation and simple linear regression in SPSS version 21. Membership characteristics recorded an aggregate mean of 4.1866 (SD = 0.5085), while financial performance recorded an aggregate mean of 4.3658 (SD = 0.5284). Pearson correlation indicated a positive and statistically significant relationship between membership characteristics and financial performance (r = 0.585, p < 0.01). Simple linear regression showed that membership characteristics explained 34.2% of the variation in financial performance (R² = 0.342), with a statistically significant standardized coefficient (β = 0.585, p < 0.05). The null hypothesis was therefore rejected. The findings indicate that savings behaviour, economically active membership, members' income levels, education and appropriate financial-product utilization are relevant dimensions of SACCO performance in the study context. The study recommends strengthening savings mobilization, financial literacy, member engagement and product development that responds to members' socioeconomic characteristics.