Nexus Between Process Financial Innovations and Financial Performance of Deposit Taking Savings and Credit Cooperative Societies in Nairobi City County, Kenya

Kenneth Luseno Andanyi and Purity Gachugu
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Kenneth Luseno Andanyi: Department of Finance, KCA University, Kenya
Purity Gachugu: Department of Finance, KCA University, Kenya

International Journal of Research and Innovation in Social Science, 2025, vol. 9, issue 5, 6697-6713

Abstract: This study sought to establish a connection between financial innovations and the financial success of Savings and Credit Cooperatives Societies taking into consideration the innovations that have been brought on board, their application and how they have impacted the financial performance of the SACCOS before the pandemic, during and post pandemic. Panel data methodology was employed. The study’s population consisted of all forty-five (45) registered Deposit taking Savings and Credit Cooperatives Societies (DT-SACCOs) registered under the cooperative societies act in Nairobi City County as per the Sacco Societies Regulatory Authority (SASSRA) list of deposit taking SACCOs with their registered offices in Nairobi. Secondary data was used. According to the study results, process innovation is positively correlated, with positive coefficients from Return on Assets (ROA). The study focused on a five-year period from 2018 to 2022. The study recommended the use internet banking, agency banking and that SACCOs should embrace more innovative strategies and come up with more user-friendly products, SACCOs need to stay current with emerging financial market developments. These include things like the use of automatic teller machines (ATMs) and other technologically advanced goods. The management of these SACCOs should consider acquisition of new software to fully automate their processes as a means of enhancing financial performance. This would stop customers from being discouraged due to long lines, tellers who are unaware of the products being offered, and drawn-out waiting times and application processes. SACCOs should adopt financial innovation strategies to boost overall productivity, profitability, and market share while also maximizing firm-specific advantages. SACCO management should embrace research and development. The regulator and advisory body (SASRA) should create effective regulation and monitoring systems to make sure that various DTS implement financial innovation techniques that are tailored to their firm characteristics to increase their efficiency and performance.

Date: 2025
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