INFLUENCE OF INNOVATION ON PERFORMANCE OF DEPOSIT TAKING SACCOS IN KENYA
Abstract
The Kenyan SACCOs have cemented their role in serving the unbanked population, through credit provision for household economies, mobilization of savings, deepening of financial access and inclusion. The financial sector has witnessed a rapid progress in digital transformation especially with Mobile banking usage. This has resulted in a new wave of digital upstarts that capitalize on changes in technology, customer behavior, and the availability of data to create innovative, customer-friendly alternatives to the services incumbents offer. These innovative platforms have enabled reach of other financial service providers to serve the unbanked population. The advancement and use of mobile technology and the changing environment has also brought disruptive new competitors within the Sacco Sub-sector in Kenya. With the increasing competition, innovation can be very important for Saccos to achieve better performance. This was the basis of this study, to investigate the extent to which innovation influences performance of DT-SACCOs in Kenya. This study was anchored on the Dynamic Capabilities Theory. Descriptive cross-sectional survey and correlational research designs were adopted. A sample size of 108 licensed DT-SACCOs in Kenya was drawn from a target population of 160 including 10 Key Informants Interviews. A semi structured questionnaire was used to collect primary data from CEOs, Managers and Sacco employees. An interview guide was used to collect additional information from Key Informants Interviews. The pilot study of the questionnaire covered 11 DT-SACCOs to test the validity and reliability. Out of the 108 questionnaires administered, 105 questionnaires were dully filled and returned representing a response rate of 97.2% percent. Data was analyzed using descriptive statistics, content analysis, Pearson’s correlation, hypotheses testing and regression analysis. The study findings suggest that the overall correlation coefficient for Innovation and performance of DT-SACCOs in Kenya was found to be 0.576 with a p-value of 0.000 <α=0.05 implying there is a significant influence of Innovation on performance of DT-SACCOs in Kenya. The study recommended need for defining and implementing sound innovative activities to remain competitive. Limitations of the study included contingencies, choice of study variable and measurement scale. Areas for further studies suggested are conducting studies in other contexts to corroborate these findings.
Key words: Innovation, Performance, Deposit-Taking-Saccos.
CITATION: Ncurai, D. M., Oloko, M., & Rambo, C, M. (2022). Influence of innovation on performance of deposit taking SACCOS in Kenya. The Strategic Journal of Business & Change Management, 9 (1), 955 – 970.
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DOI: http://dx.doi.org/10.61426/sjbcm.v9i1.2230
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