International Journal of Small Business and Entrepreneurship Research (IJSBER)

EA Journals

Financial Risks and Financial Performance of Deposit-Taking Saccos in Mt. Kenya Region, Kenya


This study investigated the relationship between financial risks and the financial performance of deposit-taking SACCOs in the Mt. Kenya region. Specifically, the research sought to determine the effect of liquidity risk, credit risk, and operational risk on the financial performance of DT-SACCOs in the Mt. Kenya region. The research was embedded on the liquidity preference theory, asymmetric information theory, and dynamic capabilities theory. The descriptive research approach and target population of 56 DT-SACCOs with head offices in the region were espoused. Primary data was collected using structured questionnaires administered to heads of risk management and secondary data from financial statements were considered. The findings revealed that liquidity risk has a negative and insignificant effect (β=-0.093, p=0.317), credit risk has a positive and significant effect (β=0.159, p=0.023), and operational risk has a negative and insignificant effect on the financial performance (β=-0.140, p=0.463) of DT-SACCOs in the Mt. Kenya region. DT-SACCOs should strive to maintain optimal liquidity and tighten their credit risk and operational risk management practices.

Keywords: Credit risk, Financial Performance, Liquidity risk, Operational Risk, financial risks

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