LENDING DECISION, SACCO SIZE AND LIQUIDITY OF FARMERS BASED DEPOSIT-TAKING SACCOS IN KENYA

John Ndung’u Gachenga,, Dickson Kamau Kinyariro, Charles Kamau Wambu and Justus Nderitu Maina
Additional contact information
John Ndung’u Gachenga,: The Co-operative University of Kenya, Nairobi, Kenya.
Dickson Kamau Kinyariro: Accounting and Finance Department, The Co-operative University of Kenya, Nairobi, Kenya.
Charles Kamau Wambu: School of Cooperative and Community Development, The Co-operative University of Kenya, Nairobi, Kenya.
Justus Nderitu Maina: Accounting and Finance Department, Catholic University of Eastern Africa, Nairobi, Kenya.

Studii Financiare (Financial Studies), 2023, vol. 27, issue 3, 57-70

Abstract: Kenyan farmers' Deposit-taking Savings and Credit Co-operatives (DT-SACCOs) have seen a drop in credit provision, from 9.6 % in 2022 to 5.2 % in 2023. Additionally, 52 % of these SACCOs have been declared illiquid due to imprudent lending practices. This has led to the closure or license revocation of 33 % of farmers-based DT-SACCOs. To address this issue, the study aimed to assess the moderating effect of SACCO size on the relationship between lending decisions and liquidity of farmers-based DT-SACCOs. The study employed an explanatory research design and utilized self-administered questionnaires. The study findings indicate that SACCO size significantly moderates the relationship between lending decisions and liquidity of farmers-based DT-SACCOs. As a recommendation, SACCOs should consider their size when making lending decisions, allowing larger SACCOs to manage more risk in loans to farmers, while smaller SACCOs may need to exercise more caution.

Keywords: credit risk; asset-liability management; financial services; African countries (search for similar items in EconPapers)
JEL-codes: G21 P13 Q13 Q14 (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.icfm.ro/RePEc/vls/vls_pdf/vol27i3p57-70.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:vls:finstu:v:27:y:2023:i:3:p:57-70

Access Statistics for this article

More articles in Studii Financiare (Financial Studies) from Centre of Financial and Monetary Research "Victor Slavescu" Contact information at EDIRC.
Bibliographic data for series maintained by Daniel Mateescu ().