SASRA Financial Monitoring and Reporting Tools and Financial Performance of DT-SACCOS in Kenya

Abstract

Despite being crucial to Kenya's socioeconomic development, DT-SACCOs' financial performance is significantly impacted by issues related to financial reporting and monitoring that are getting worse. Although, there is a wealth of research on financial performance aspects including; earnings, liquidity, asset quality, and capital adequacy, the findings of extant studies are inconsistent occasioned. The current study as a consequence closed these knowledge gaps by evaluating the impact of financial tools for financial reporting and monitoring provided by SASRA on the financial performance of DT-SACCOs in Kenya. The specific objective to guide the study was to find out the effect of capital adequacy, asset quality, earnings, and liquidity on the financial performance of deposit-taking savings and credit cooperative societies in Kenya. The study, which applied a positivist paradigm, adopt a correlational research design, and employ a quantitative approach. The target population was the 181 DT-SACCOs engaged in Kenya SACCO business between 2018 and 2022, where census approach was employed. Quantitative evaluation of the data is required to produce descriptive and inferential statistics. The study concludes that; capital adequacy has a statistically significant positive impact on the financial performance of Kenyan DT-SACCOs, asset quality, conversely exerts a statistically significant negative influence on financial performance, earning ability, similarly, demonstrates a significant negative effect on financial performance of Kenyan DT-SACCO, and liquidity has a positive significant effect on Kenyan DT-SACCOs' financial performance. The study recommends that DT-SACCOs should, implement robust internal mechanisms to continuously monitor their capital adequacy ratios, enhance asset quality and maintain financial stability through comprehensive credit evaluation mechanisms, conduct a comprehensive review of operational costs to identify inefficiencies and reduce unnecessary expenditures, and continuously monitor liquidity levels and adjust policies to balance cash availability with profitability objectives.