Relationship Between Alternative Financing And Growth Of Savings And Credit Co-operative Societies In Baringo County

Abstract

Savings and credit cooperative societies (SACCOS) have continued to play a significant role in creation of wealth across all sectors of the Kenyan economy. The SACCO model is perceived to be crucial for sustainable development and as the best vehicle for addressing poverty among majority of Kenyans. Despite its success it is faced with a number of challenges with the key being access to adequate capital to financing its operations and growth. Alternative sources of financing are currently seen to be the new frontier by many saccos as a cheaper and efficient way of meeting their capital requirements however its role in their growth is still unclear. The general objective of this study was to investigate the relationship between alternative financing and growth of saccos, in Baringo county. The specific objectives were to establish the relationship between fixed deposits, interest from short term investments, interests from government guaranteed loans & financial intermediation with the growth achieved by SACCOS in Baringo County. The study employed a descriptive research design targeting all SACCOS in Baringo County. A census approach was used where primary data was collected using semi-structured questionnaires. Descriptive statistics and inferential statistics inform of regression and correlation analysis was used to establish the relationship between the different forms of alternative financing and sacco growth. It was established that fixed deposits and interest from short term investments were the most widely used sources of alternative financing with both the interest and duration of the facility significantly correlating with SACCO growth. Interest from government guaranteed loans were significantly correlating with the growth of SACCOS. The study concluded that fixed deposits, interest from short term investments and from government guaranteed loans influenced the growth of SACCOS in Baringo County.