Effect of Acquired Entrepreneurship Skills on Financial Performance of Deposit Taking SACCOs in Kenya

Abstract

Savings and Credit Cooperative societies (SACCOs) in Kenya play an important role in economic development as part of the financial system. However, despite the positive contribution, high failure rates of Deposit Taking SACCOs (DT-SACCOs) still frustrate this effort. Out of the 176 DT-SACCOs in 2016, 12 were licensed to operate on a six months renewable conditional and restricted license of which at the end of the period, two had their license revoked having failed to meet and maintain prescribed statutory standards by SASRA. The purpose of this study was therefore to assess the effect of acquired Entrepreneurship skills on Financial Performance among DT-SACCOs in Kenya. The theory that underpinned this study was Psychological entrepreneurship theory and it applied both positivistic and interpretivism philosophical foundations. The study adopted explanatory survey design to answer the research questions. The target population were 74 licensed DT-SACCOs in Kenya. Purposive sampling technique was used to obtain 37 best performing and 37 least performing DTSACCOs to provide 3 respondents each. Primary data was collected using structured questionnaires with a likert scale while data collection sheets were used for collecting secondary © Ronoh, Njenga, Kibas & Kibati Licensed under Creative Common Page 92 data on DT-SACCO’s financial performance. Financial performance was measured using return on investment and return on assets. A drop and pick later technique was be used. Reliability (cronbach alpha) and validity (face validity) was 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 results indicated that there was a positive relationship between acquired entrepreneurship skills and financial performance of DT-SACCOs. The study concluded that the variable under study was statistically significant in explaining the financial performance of DT-SACCOs in Kenya.