| dc.description.abstract | Financial performance of SACCOs in Kenya has been a major concern in recent years, as
they play a critical role in promoting financial inclusion and economic development in the
country. SACCOs in Kenya have been criticized for making poor investment decisions,
leading to losses and declining financial performance. Several studies have explored the
effect of investment decisions on the financial performance of SACCOs. However, these
studies have not been able to fully solve the financial performance problem facing
SACCOs in Kenya due to various factors. The study on investment decisions' effect on
SACCOs' financial performance in Bungoma County was significant for promoting
financial inclusion and overcoming challenges faced by SACCOs, including competition
from digital financial services. The study aimed at examining the effect of investment
decisions on the financial performance of Savings and Credit Cooperative Organizations in
Bungoma County, Kenya. The research focused on three specific objectives: expansion,
replacement and research and development decisions and their effect on financial
performance. The study was guided by three theories that include Tobin q theory,
Transaction cost theory and Modigliani-Miller Theorem. To achieve its objectives, the
study used a quantitative cross-sectional survey design. A total of 600 respondents were
targeted from where 240 respondents were sampled including CEO, CFO, accounting staff
and administrative staff. Stratified, proportionate and simple random sampling was used.
To ensure the validity and reliability of the data collected, the researcher used various
methods. Firstly, expert review, construct and criterion validity were employed to ensure
validity of the questionnaires used. Secondly, the Cronbach alpha method was used to test
the reliability of the questionnaires. A pilot study was conducted to identify any issues with
the questionnaires before the actual study. After collecting data, it was cleaned and coded
to ensure that was ready for analysis. Descriptive statistics such as frequency and
percentages were computed to summarize the investment decisions and financial
performance. Expansion decision was a significant predictor of financial performance (r =
0.708, p-value =0.000 < 0.05). R-square of 0.501 implied that variation of financial
performance at 50.1% was explained by expansion decision. Replacement decision was a
significant predictor of financial performance (r= 0.738, p-value = 0.000<0.05). R-square
of 0.544 implied that variation of 54.4% of financial performance was explained by
replacement decision. The results also confirmed that at 0.05 significance level research
and development was a significant predictor of financial performance (r = 0.673, p-value
=0.000< 0.05). R-square was 0.453 implied that variation of 45.3% of financial
performance was explained by research and development. The recommendations were that
on expansion decisions, SACCOs should open more branches and invest in technology so
as to maintain the significance level on financial performance. Replacement decisions
should avoid outdated technology, design amicable policies and procedures so as to
maintain the significance level on financial performance. Research and development
decisions such as introduction of new products and services should be put in place to help
increase market share that would stimulate financial performance. | en_US |
