CORPORATE GOVERNANCE AND FINANCIAL PERFORMANCE OF AGRO-BASED DEPOSIT-TAKING SACCOS IN KENYA
Abstract
The significant contribution of SACCO sub-sector cannot be ignored in the Kenyan economy with the sector contributing directly to 6.67 % of the country’s GDP in 2021. Agro based SACCOS whose membership is comprised of farmers account to 46.79 % of total SACCO membership in Kenya and are spread across the whole country. Past studies have not concentrated on this particular segment of the economy and this prompts the current study aimed to establish the influence of corporate governance and financial performance of Agro based DT Saccos in Kenya. Specifically, the study sought to examine the influence of board size, board composition and audit committee on the financial performance of Agro based DT Saccos in Kenya. The study adopted firm size to act as the moderating variable. A census survey on all the 35 Agro based DT Saccos in Kenya was done. Further, descriptive survey design was adopted. The researcher use secondary panel data covering the period 2018 to 2021. Secondary data was collected with from the firm records. The data was sourced from the published audited annual reports of these Saccos. Analysis of the collected data gathered were be done using STATA after being subjected to the following diagnostic tests, multicollinearity, Hausman, normality, stationarity heteroscedasticity and autocorrelation tests. The analyzed data is presented using pie charts, frequency tables and histograms. The study results revealed that board size was negatively related to financial performance. Other variables including board composition, audit committee and firm size had positive significant relations with financial performance. The study therefore recommends that Saccos should minimize the size of their boards so at to reduce the unnecessary management costs. They should broaden the range of board managers and continue to ensure that audit committee roes are properly clarified to improve the efficiency of their services. Lastly, they Saccos should engage in robust recruitment and marketing of their products and services in order to boost their capital base since firm size has been shown to improve financial performance.
Keywords: Audit Committee, Corporate Governance, Board Composition, Board of Directors, Board Member, Board Size, Non-Executive.
CITATION: Muema, Z. K., Otwoko, B., & Juma, D. (2025). Corporate governance and financial performance of agro-based deposit-taking SACCOs in Kenya. The Strategic Journal of Business & Change Management, 12 (2), 1018 – 1039. http://dx.doi.org/10.61426/sjbcm.v12i2.3255
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DOI: http://dx.doi.org/10.61426/sjbcm.v12i2.3248
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