Examining the Effect of Risk Prevention Practices on Financial Competitiveness of Savings and Credit Co-operative Societies in Kirinyaga County, Kenya
Keywords:
Risk Prevention Measures, Financial Competitiveness, Planning, Forecasting and Compliance.Abstract
Despite the existence of SASRA regulation, many SACCOs are experiencing challenges related to risk management system. This study sought to investigate risk prevention practices adopted by SACCOs in Kirinyaga County to enhance their financial competitiveness and help them overcome the risk management system related challenges. The specific objective of this study was to determine the risk prevention practices employed by deposit taking SACCOs in Kirinyaga County. The study is premised on Financial Theory. The study adopted a descriptive research design that helped in describing the phenomena of risk prevention practices in SACCOs. Information was collected from 23 SACCOs operating in Kirinyaga County. Primary data was collected from the top management of the SACCOs using a questionnaire. The study established a positive and significant relationship between risk prevention practices and the financial competitiveness of SACCOs within Kirinyaga County. The coefficient of determination was at 83.1%, an indicator that the explanatory variable explained more than eighty percent of variance in the financial competitiveness of SACCOs in Kirinyaga County. The p-value and regression coefficient generated after running the regression model for risk prevention practices was (β= 0.471, p = 0.012). The study concluded that risk prevention practices plays and important role in influencing the financial competitiveness of SACCOs. The implementation of risk management strategies in all the SACCOs in order to improve the financial competitiveness is recommended.
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