Effect of Risk Identification on the Financial Performance of Deposit-Taking Saccos in Kenya

Purpose: To establish the effect of risk identification upon the financial performance of deposit-taking SACCOs in KenyaDesign/Methodology/Approach: The study employed the positivist research philosophy but opted for descriptive survey and causal research designs. Data was gathered from a stratified random sample of 122 DTSACCOs drawn from a population of 176 SACCOs classified on the tier of regulation. Primary data came via questionnaires, while secondary data was taken from audited financial statements. The quantitative data were analysed using SPSS - both descriptive and inferential techniques.Findings: A strong positive relationship exists between financial risk identification and financial performance as a result of reduced operational costs (R = 0.771). The coefficient of determination (R² = 0.595) indicates that around 59.5% of the variation in operational costs is explained by risk identification. The adjusted R² value of 0.591 shows that this is still highly significant even after allowing for the number of predictors.Implications/Originality/Value: The study establishes once again that risk identification has a positive impact upon the financial performance of Deposit-Taking Sacco Societies. Such performance is enhanced via cost efficiency, reduced credit losses, and early detection of risks that threaten operational sustainability.&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&& &&&&&&&&&&&&&&&&&&&&&&&&&&