International Journal of Research in Finance and Management
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E-ISSN: 2617-5762|P-ISSN: 2617-5754

International Journal of Research in Finance and Management

2022, Vol. 5, Issue 2
An analysis of moderating effect of investment decisions on the relationship between corporate risk management and financial performance of deposit taking savings and credit cooperative societies in western Kenya

Grace Kemunto Otanga and Robert B Mule

Globally, the financial performance of Savings and Credit Cooperative Societies (SACCOs) has been improving steadily as shown by the increase in membership which is approximated at one billion, with the turnover from the world’s 300 top SACCOs amounting to $2.5 trillion as at December 2017. In Africa, SACCOs have had a significant role in transforming the continent through financial support of businesses. They play a fundamental role in Kenya’s financial sector by assisting members save money and offer credit facilities. However, statistics show that financial performance of DT-SACCOs is fluctuating as shown by non-performing loans which stood at 5.12%, 5.23% and 6.14% as at 2015, 2016 and 2017 respectively, with that of DT-SACCOs in Western Kenya averaging 6.2% for the five years. The study sought to analyse the moderating effect of investment decisions on the relationship between corporate risk management and financial performance of DT-SACCOs in Western Kenya. Secondary data from financial statements was used while key informants who were chairpersons of the DT-SACCOs provided primary data that was used for triangulation purposes. The study revealed a significant moderating effect of investment decisions on the relationship between corporate risk management and financial performance (∆R2 = .166, p < 0.05), indicating that incorporating investment decisions in corporate risk management improves financial performance by 16.6%. The study concludes that investment decisions are important when considered alongside corporate risk management, and recommends that DT-SACCOs in Western Kenya ought to invest in corporate risk management constructs of credit risk and operational risk management while incorporating investment decisions.
Pages : 174-179 | 30 Views | 18 Downloads
How to cite this article:
Grace Kemunto Otanga, Robert B Mule. An analysis of moderating effect of investment decisions on the relationship between corporate risk management and financial performance of deposit taking savings and credit cooperative societies in western Kenya. Int J Res Finance Manage 2022;5(2):174-179.
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International Journal of Research in Finance and Management