INFLUENCE OF LOAN INSURANCE POLICY ON FINANCIAL PERFORMANCE OF SAVINGS AND CREDIT COOPERATIVES IN KAKAMEGA COUNTY, KENYA
Abstract
This study investigated the influence of loan insurance policy on financial performance SACCOs in Kakamega County, Kenya. The study adopted descriptive survey and targeted 143 senior management staff from 13 SACCOs located in Kakamega County from where a sample size of 105 was selected using stratified random sampling technique. The study used structured questionnaire as the main research instrument. A pilot study was conducted among 20 senior management staff of SACCOs in Vihiga County, Kenya, so as to check research instrument’s validity and reliability. Statistical Package for Social Sciences version 24 was used in data analysis. Descriptive statistics (percentages, frequencies, mean, and standard deviations) were computed. A total of 97 respondents out of the sampled 105 respondents returned completely filled questionnaires representing a response rate of 92.4%, thus good for generalizability of research findings to a wider population. The results showed that loan insurance policy significantly influences financial performance of SACCOs in Kakamega County. That is; loan insurance policy (independent variable) was significant predictor of SACCO performance (dependent variable). The study concluded that loan insurance policy impacts positively on SACCO’s financial growth in the sense that convenient loan insurance rates or premiums can assist to cover non-performing loans which subsequently impact on financial growth of a SACCO. It was recommended that SACCOs should embrace this new concept of loan insurance covers as strategic form loan loss provisioning so as to check on non-performing loans ratios which always influence financial performance of SACCOs.
Key Words: Loan Insurance, Financial Performance of SACCOs
CITATION: Angweye, E. I., & Otinga, H. N. (2019). Influence of loan insurance policy on financial performance of Savings and Credit Cooperatives in Kakamega County, Kenya. The Strategic Journal of Business & Change Management, 7(1), 150 – 159.
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DOI: http://dx.doi.org/10.61426/sjbcm.v7i1.1513
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