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The Moderating Effect Of Sensitivity To Market Risk On Internal Factors Affecting Financial Performance Of Savings And Credit Societies In Kenya

Author

Listed:
  • Jane J. Barus

  • Prof. Willy Muturi

  • Dr. Patrick Kibati

  • Dr. Joel Koima

Abstract

Purpose: The purpose of this study was to establish the moderating effect of sensitivity to market risk on internal factors affecting financial performance of savings and credit societies in Kenya. Methodology: The study employed an explanatory research design. The target population was 83 registered deposit taking SACCO's in Kenya that have been in operation for the last five years. The sample size for the study was all 83 SACCOs that have remained in existence since 2011-2015. Census methodology was used in the study. Both primary and secondary sources of data were employed. Multiple linear regression models were used to analyze the data using statistical package for the social sciences (SPSS) and STATA. Descriptive and inferential analysis was conducted to analyze the data. The data was presented using tables and graphs. Results: The moderation results indicated that the interaction effect of sensitivity to market risk on the relationship between the independent variables (except management efficiency) and dependent variable was significant. Since the calculated p value of the interaction was 0.000<0.05, and thus sensitivity to market risk has a statistical significant moderating effect on internal determinants of financial performance of savings and credit societies in Kenya. Unique contribution to theory, practice and policy: The study recommended that SACCOs should monitor the variations in market risks, especially interest rates and inflation rates. These macroeconomic factors tend fluctuate often and, hence it's important for the organizations to observe them.

Suggested Citation

  • Jane J. Barus & Prof. Willy Muturi & Dr. Patrick Kibati & Dr. Joel Koima, 2017. "The Moderating Effect Of Sensitivity To Market Risk On Internal Factors Affecting Financial Performance Of Savings And Credit Societies In Kenya," International Journal of Finance and Accounting, IPRJB, vol. 2(6), pages 1-10.
    • Handle: RePEc:bdu:ojijfa:v:2:y:2017:i:6:p:1-10:id:457
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    References listed on IDEAS

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    1. TOMULEASA, Ioana-Iuliana & COCRIŞ, Vasile, 2014. "Measuring The Financial Performance Of The European Systemically Important Banks," Studii Financiare (Financial Studies), Centre of Financial and Monetary Research "Victor Slavescu", vol. 18(4), pages 31-51.
    2. Paul Munene Muiruri & Florence S. Memba & Agnes Njeru, 2015. "Moderating Effects of Bank Ownership on the Relationship between Securitization Uptake and Financial Performance of Commercial Banks in Kenya," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 1(2), pages 24-43, June.
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