INFLUENCE OF LIQUIDITY MANAGEMENT PRACTICES ON PROFITABILITY OF DEPOSIT TAKING SACCOs IN KAKAMEGA COUNTY
Abstract
This study sought to examine the influence of liquidity management on profitability of deposit taking SACCO in Kakamega County. The study focused on establishing the influence of liquidity risk practices on profitability of deposit taking SACCO in Kakamega County to determine the influence of liquidity monitoring practices on profitability of deposit taking SACCO in Kakamega County and to determine the influence of liquidity decision practices on profitability of deposit taking SACCO in Kakamega County. The study adopted descriptive survey design. The study targeted 11 (eleven) Deposit taking SACCOs in Kakamega County. These were SACCOs which were allowed to take deposits from their members in Kakamega County. Forty seven (47) respondents which comprised of accountants, risk and audit managers, finance managers, credit managers and Front Office Services Activity managers were sampled using census sampling methods. Primary data was collected using structured questionnaire. Validity was achieved through expert opinions of the supervisors while reliability was achieved through Cronbach alpha (>0.7). Quantitative data was analysed descriptively using frequencies, Mean, Standard deviation and percentage while Pearson’s Product Moment Correlation Coefficient and Multiple linear regression analysis with aid of SPSS version 23 to generate inferential statistics. The data was presented in form of tables and regression models. The results revealed liquidity risk management practices, liquidity decision, and liquidity monitoring and cash management practices significant influence profitability of deposit taking SACCOs in Kakamega County. Liquidity management practices account for 66.3% significant variance in profitability (R square =.663, P=0.000). Therefore, the study concluded that liquidity management practices have significant influence on the profitability of deposit taking SACCOs in Kakamega County. The study recommended that that DTS should put prudent measures to ensure effective monitoring of liquidity. The study also recommended that SACCOs should acquire quality human resource so as to come up with sound liquidity decisions.
Key Words: liquidity risk, liquidity monitoring, liquidity decision, cash management, Deposit Taking SACCOs
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DOI: http://dx.doi.org/10.61426/sjbcm.v5i4.941
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