Capacity Building Dimensions and Financial Sustainability of Regulated DT and NWDT Saccos in Kenya
Abstract
This study examined the independent effects of capacity building dimensions on financial sustainability of Deposit-Taking and Non-Withdrawable Deposit-Taking SACCOs regulated by SASRA in Kenya. The target population was 355 regulated SACCOs, with a sample of 206 SACCOs determined using Yamane formula. The study employed triangulation comprising survey of 186 managers representing 90.3% response rate, 20 semi-structured interviews and analysis of five-year SASRA secondary data from 2020 to 2024. Diagnostics confirmed model suitability with VIF max 1.317, normality p=0.680, homoscedasticity p=0.674 and Durbin-Watson 1.84, while reliability ranged α=0.723 to 0.843. Findings revealed that training (M=3.47, β=0.308, p<0.001), governance (M=3.10, β=0.275, p<0.001) and innovation (M=3.13, β=0.265, p<0.001) are distinct and significant predictors of financial sustainability. The model explained 42.5% variance (R²=0.425, F=44.784, p<0.001). Governance shows the largest unrealized return with lowest mean but second highest beta, while innovation is cost-constrained rather than attitude-constrained. The study recommends SASRA enforcement of board competence standards and subsidization of shared USSD infrastructure for NWDT and Tier 3 SACCOs through apex bodies, sequenced as training institutionalization, board professionalization and shared innovation. This is the first tier-disaggregated national test of three dimensions in one model with primary and secondary triangulation in Kenya.
Keywords: Capacity Building, Financial Sustainability, DT and NWDT SACCOs, Board Governance, SASRA; Kenya
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