Corporate Social Responsibility Strategy And Financial Performance Of Deposit Taking SACCOs In Kenya

Abstract

This study sought to establish the relationship between Corporate Social Responsibility strategy and the financial performance of deposit taking Savings and Credit Co-operatives societies in Kenya. The SACCO subsector is part of the Kenyan Co-operative sector comprising of both financial and non financial cooperatives. Saving and credit co-operative (SACCO) are the financial cooperatives. They are an important part of the financial sector in Kenya, providing savings, credit and insurance services to a large portion of the population. Stakeholder management is paramount in creating trust and confidence to key stakeholder especially in deposits taking SACCOs and in keeping them satisfied. It has been argued that CSR has an indirect influence in determining whether or not a company is or remain successful or not. Descriptive research method and inferential analysis was used in this study. Questionnaires ware used to collect primary data. To ensure that the research instrument yields valid data, the researcher engaged expert in the relevant field in scrutinizing it. The designed instrument was counter checked by the supervisor and peers in the area of specialization. Pilot study was carried out to check on the reliability and validity of the instrument and a Cronbach‘s Alpha of 0.915 was obtained. Data was collected from a sample of 54 Deposit taking SACCOs out of a population of 180 licensed DTS. This made a sample of 130 respondents. Collected data was then edited in the field to clean it up. Data was processed using descriptive analysis and multiple regression analysis performed to determine the relationships between the stakeholder generic strategies and performance of SACCO societies. Data analysis was done using Statistical Package of Social Science (SPSS) Version 20. Research findings were that CSR strategy has positive relationship with the performance of deposit taking SAACOs. The research contributes to both stakeholder management and CSR theories by supporting previous studies that stakeholder management strategies have positive relationship with SACCO societies‘ performance. The study offered practical recommendations to managers to be proactive in stakeholder management and to adopt CSR as a strategy to enhance various relationships and financial performance of their SACCOs.