Financial Management Practices and Profitability of Deposit-Taking Savings and Credit Cooperative Societies in Nyeri County, Kenya
DOI:
https://doi.org/10.53819/81018102t7088Abstract
This study investigated the effect of financial management practices on profitability of DT Saccos in Nyeri County, Kenya. The study specifically investigated the effects of credit risk management practices, working capital management practices, capital budgeting practices and cash management practices on profitability of DT SACCOs in Nyeri County, Kenya. The research was anchored on liquidity preference theory, financial intermediation theory and the modern portfolio theory. This study adopted an exploratory research design to identify the cause and effect relationship between credit risk management practices, working capital management practices, capital budgeting practices and cash management practices on profitability of DT SACCOs in Nyeri County, Kenya. The study targeted Eight (8) DT Saccos operating within Nyeri County, Kenya as per SASRA (2022). Secondary data was drawn from the company’s profit after tax, total assets, total delinquency loans, share capital and liquidity ratio for the years 2018 to 2022. Data collected was analysed and interpreted using descriptive and inferential analysis and presented in Tables. The study established that the practices of financial management practices significantly and positively impact the profitability of deposit-taking SACCOs in Nyeri County, Kenya. Regression analysis of the findings indicated that SACCOs have a latent degree of profitability despite maintaining practices in financial management. The study recommends that SACCOs strengthen credit risk management through data-driven appraisal, digital monitoring, and effective recovery to reduce defaults. It emphasizes that SACCOs should prioritize equity financing, boost member contributions and reserves and adopt robust cash management systems to enhance long-term sustainability and profitability.
Key Words: Financial Management, Credit Risk Management, Working Capital Management, Capital Budgeting Management, Cash Management
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