Effect of Business Risk on Performance of Deposit Taking Saccos in North Rift Counties, Kenya
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Date
2020-10-30
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Publisher
International Journal of Finance, Accounting and Economics (IJFAE)
Abstract
Saccos perform an important role in the
financial sector in Kenya by providing savings
and credit services to a large portion of the
population. Dividend decision is the policy that
the management formulates in regard to
earnings for distribution as dividends among
shareholders. The determinants of dividend
decisions include, Sacco returns, Sacco size,
business risks, growth opportunities among
others. Saccos and more so deposit taking
Saccos need to issue dividends to their
members. Deposit taking Saccos in Kenya and
the North Rift in particular has to adjust their way of doing business in order to maximize the shareholder
value and increase the market share. The main purpose of this study is to establish the determinants of
dividends policy decisions on performance of deposit taking Saccos’ in North Rift Counties, Kenya.
Specifically, the study determined the effect of business risk on performance of deposit taking Saccos’ Rift
Counties in Kenya. The study was guided by Agency theoy. The target population was all nine Saccos that had
been registered by SASRA in the North Rift Region by the end of July 2018. The respondents included all the
management and board members of the deposit taking Saccos in the North Rift Region. Primary data and
secondary data was used and the data was collected using open ended questionnaires. Data was be analysed
using both descriptive and inferential statistics. The SPSS Version 24 was used to aid in the data analysis. The
study established that Sacco returns had a positive and significant effect on performance of deposit taking
Saccos (β= 0.170; p< 0.05). The findings of the study were of great significance to managers and policy
makers to make policies which enhances the performance of the Saccos. The finding also does provide input
for future academic works to be conducted on the Sacco performance.
Description
Keywords
: Business Risk, Performance, Dividend policy Deposit taking Sacco