Effect of Business Management Training on Financial Performance of Deposit Taking SACCOs in Kenya

Abstract

This research only focused on the effect of Business Management Training on Financial Performance of DT-SACCOs with respect to the constructs of Accounting Skills, Entrepreneurship Skills, Financial Management Skills, Marketing Management Skills and Strategic Leadership Skills. The theories that underpin this study were; theory of internal control, psychological theory, financial stewardship theory, resource based theory and porter’s theory of competitive advantage. This study applied both positivistic and interpretivism philosophical foundations. It adopted explanatory survey design to answer the research questions. The target population was 176 licensed DT-SACCOs in Kenya. Random sampling technique was used to obtain 74 DT-SACCOs which provided 3 respondents each. Primary data was collected using structured questionnaires with a likert scale while secondary data collection sheet was used for collecting information concerning DT-SACCO’s financial performance. A drop and pick later technique was used. Reliability (cronbach alpha) and validity were used to pre-test the research questionnaire. Data was analyzed using both inferential (correlation and regression) and descriptive (frequencies, percentages, mean and standard deviation) statistics using Statistical Package for Social Sciences (SPSS). The qualitative data was coded and classified into major themes from which a summary report was made. The correlation analysis results of the study show a significant positive relationship between all the independent variables (accounting skills, entrepreneurship skills, financial management skills, marketing skills and strategic leadership skills) and financial performance. Based on the results of the multiple regressions, the five independent variables could explain only 41.4% of the changes in financial performance. After the interaction of SASRA Regulations, an R Square Change of 0.613 showed that addition of its effect to the model led to 61.3% increase in variation of financial performance and as such the increase was statistically significant. The study thus concluded that all the variables under study were statistically significant in explaining the financial performance of DT-SACCOs in Kenya. The study recommends that the DT-SACCOs should; put tighter internal controls system for proper business accounts management, hire managers based on an entrepreneurial inclination and set objectives for value maximization to be attained complimented by a vision. Further, it should focus on both human and financial resources to penetrate the market and use competitive forces strategy to defend themselves against competition.