INFLUENCE OF FIRM SELECTED CHARACTERISTICS ON DIVIDEND PAYOUT IN DEPOSIT TAKING SAVINGS AND CREDIT CO-OPERATIVE SOCIETIES IN KENYA
Abstract
This study examined the influence of profitability, investment opportunities, SACCOs size, and growth opportunities on dividend payout in deposit taking Saccos in Western Kenya. The study was guided by several pertinent theories, among them, Modigliani and Miller theory of dividend irrelevance, bird in hand theory, residual theory of dividends, dividend signaling effect theory, clientele effect theory on dividend distribution, pecking order theory and financial intermediation theory. The study targeted 74 respondents comprising CEO, internal auditors, finance officers; FOSA supervisors and accountants. The study adopted census sampling procedure. Primary data was collected using structured questionnaire. Secondary data was collected from audited financial books and company information filed at SASRA by the SACCOs under study. Data was analyzed through the use of descriptive statistics, correlation analysis and regression analysis methods using SPSS version 20.0 by regressing each variable on the dependent variable and at the end of the research, the link between each independent variable and dividend payout in deposit taking. The results revealed that selected firm characteristics have significant relationship with dividend payout of deposit taking Saccos in Western Kenya. Profitability was found to have significant positive influence on dividend payout. Other variables, investment decision, Sacco Size and growth opportunities were also found to have significant positive influence on dividend payout. The study concluded that selected firm characteristics have significant influence on dividend payout of deposit taking SACCOs in Western Kenya. The study recommended that there is need for management of DTS to increase their profitability so as to achieve higher dividend payout over time. The study recommended that large Deposit Taking SACCOs should take advantage of their size to achieve higher dividend payout. The study recommended that management of Saccos should consider investment decision making to be made through careful planning for expansion, equipment purchases or investment in any form and the Saccos should make financing decision in a planned way; The study recommended that the management of Saccos should ensure that they have reliable and effective access to information regarding growth opportunities both locally and internationally.
Key Words: Profitability, Investment Opportunities, SACCOs Size, Growth Opportunities, Dividend Payout
CITATION: Wabuche, W., Miroga, J. & Otinga, H. (2021). Influence of firm selected characteristics on dividend payout in deposit taking Savings and Credit Co-Operative Societies in Kenya. The Strategic Journal of Business & Change Management, 8 (1), 729 – 751.
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DOI: http://dx.doi.org/10.61426/sjbcm.v8i1.1946
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