DETERMINANTS OF DIVIDEND SMOOTHING IN KUSCCO AFFILIATED SACCOS IN KAKAMEGA COUNTY
Abstract
The purpose of this study was to analyze the determinants of dividend smoothing in KUSCCO affiliated SACCOs in Kakamega County. Specific objectives were to examine the influence of firm size on dividend smoothing of KUSCO affiliated SACCOs in Kakamega County, investigate the influence of financial risks on dividend smoothing on KUSCCO affiliated SACCOs in Kakamega County, analyze the shareholder ownership influence on dividend smoothing on KUSCCO affiliated SACCOs in Kakamega County and to find out the influence of profitability on dividend smoothing on KUSCCO affiliated SACCOs in Kakamega County. To achieve the general objective of the study, a survey was conducted on SACCOs affiliated to KUSCCO and operational. Data on general information was collected using the questionnaire. Data analysis was done using descriptive and inferential statistics. Under inferential statistics correlation analysis and multiple regressions analysis was used. The findings indicated that profitability, firm size and shareholder ownership have positive and significant effect on dividend smoothing. This implied that their increase would result to increase in dividend smoothing. On the other hand, financial risk has negative effect on dividend smoothing of SACCOs affiliated to KUSCCO in Kakamega County. This postulated that increase in financial risk would result to reduction in dividend smoothing. Therefore, the study concluded that dividend smoothing is significantly influenced by shareholder concentration, profitability and firm size. The study recommended that there is need for Saccos to increase their profitability so as to achieve dividend smoothing over time. This can be achieved by increasing the rate of return of assets. In this case, management is recommended to utilize their assets in a profitable manner so as to achieve dividend smoothing.
Key Word: Firm Size, Financial Risks, Shareholder Ownership, Profitability, Dividend Smoothing
CITATION: Rutto, F. K., & Miroga, J. (2020). Determinants of dividend smoothing in KUSCCO affiliated SACCOs in Kakamega County. The Strategic Journal of Business & Change Management, 7(3), 1216 – 1232.
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DOI: http://dx.doi.org/10.61426/sjbcm.v7i3.1737
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