Effect of Compliance to Sacco Regulatory Authority (SASRA) Regulations on Financial Performance of Deposit Taking Savings and Credit Co-Operatives (SACCO) Kenya

Abstract

Aim: This study sought to establish the effect of SASRA Regulations on SACCOs’ financial performance in Nairobi County. More specifically, the study sought to investigate the effect on staff competence, quality of board of directors and corporate governance on financial performance of SACCOs. Study Design: Data were collected from all the 34 Deposit Taking SACCOs in Nairobi County using a structured questionnaire. Methodology: Both descriptive and inferential statistics were used to analyze the data. Results: The study findings indicated that the quality of the Board of Directors, staff competence, corporate governance (β1 =.567; p =0.013), (β2 =.705; p =0.000) and (β3 =.778; p = 0.019) respectively had significant effect on the financial performance of the SACCOs. Conclusions: Corporate governance was identified as the most significant effect of SASRA regulations on the SACCOs financial performance. The researchers recommend that SASRA regulations should be modified to upgrade the roles and qualifications of the Board members in order for them to play a more influential role in improving the financial performance of the SACCOs and also there’s need to have more staff involvement in decision making at higher levels at some point in their careers in order to develop their potential as future managers and directors of the SACCOs.