Susan Jebet Biwott


SACCO’s are in the business of safeguarding money and other valuable assets for the Members besides providing loans and offering investment financial services. Credit creation is the main income generating activity for KARI SACCO LIMITED. The general objective of the project was to determine effects of credit risk management on the financial performance of KARI SACCO LIMITED. Specifically, the study sought to find out the role played by credit monitoring practices on the financial performance of KARI SACCO LIMITED. Descriptive research design was used with a target population of 1,037 and a sample size of 104 Sacco members selected using the stratified sampling technique. The questionnaire was formulated with both open ended and close ended questions based on the objectives of the study. Both the questionnaire and the Data collection sheet was administered to the Sacco members through drop and pick method. The entry and analysis of data was done using SPSS (Statistical Package for Social Sciences) program. Quantitative data was summarized using descriptive statistics which included mean, mode, median, standard deviations, frequencies and percentages. Relationship between variables was determined using the multiple regression models. The data was presented in form of charts, graphs and percentages. The study showed that credit risk management significantly influenced the financial performance of Kari Sacco when the one variable was used. It was evident that if the credit risk management was sound then, the performance level would be satisfactory. Furthermore, if it was poor, the performance would be low. Credit risk management practices employed therefore had a direct impact on the financial performance of the Sacco. The researcher suggests that further study should be undertaken in order to investigate the effects of credit risk management on the financial performance of Sacco’s as it did not exhaust everything concerning credit risk. Findings from such study will provide more insight on the relationship between the said determinants, which could be useful in informing risk management strategies and policy in Kenyan SACCO’s.

Key Words: Credit risk management, Financial Performance, Kenya Agricultural Research institute Sacco, Credit Risk

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