Abstract
The study sought to examine the effect of capital adequacy, asset quality, management efficiency, earnings ability, liquidity and financial performance of Deposit Taking Savings and Credit Cooperative Societies in Kenya. The study originates from the Doctoral dissertation of the first author in which the co-authors served as supervisors. Descriptive and panel regression analysis were applied based on secondary data obtained for the period 2013 to 2022. The study established that capital adequacy has insignificant effect on financial performance of deposit taking SACCOs in Kenya. It was established that asset quality has significant effect on financial performance of deposit taking SACCOs in Kenya. It was established that management efficiency has insignificant effect on financial performance of deposit taking SACCOs in Kenya. It was established that earnings ability has significant effect on financial performance of deposit taking SACCOs in Kenya. The study established that liquidity has insignificant effect on financial performance of deposit taking SACCOs in Kenya. Effective credit risk system should be put in place to ensure proper identification, assessment, monitoring as well as control of credit risks. The study recommends that the managers of SACCOs should strive towards increasing the business net worth while ensuring competitiveness in the business environment. This can be achieved through continuous product innovation alongside having leverage on emerging technology. Additional studies can be done specifically on the effect of capital adequacy, management efficiency and liquidity on financial performance of deposit taking SACCOs in Kenya. This is in view of their insignificant predictive effect on financial performance. As such, additional researches on these variables can be based on different methodological approaches. Keywords: Capital Adequacy, Asset Quality, Management Efficiency, Earnings Ability, Liquidity and Financial Performance
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