Abstract:
Financial innovations are crucial to sustaining financial performance. The
study sought to establish the influence of financial innovations on financial
performance of SACCO’s in Nyeri County. This study was guided by Rogers’s
Innovation Diffusion Theory, Technology Adoption Models and Task- Technology
Fit Theory as the theoretical frameworks. The population of the study was the fifty
six(56) active SACCO’s operating in Nyeri County as at December 31, 2013.This
study employed a cross sectional survey research design and stratified sampling
technique was used to determine the sample of 30 SACCO's. A semi structured
questionnaire was used as the data collection tool and was self-administered to the
target sample of respondents. To establish the validity and reliability of the data
collection instrument, a pilot study was carried out. Cronbach alpha coefficient
was used to assess the reliability of the data collection tool. Factor analysis was
used to measure the construct validity of the questionnaire. Descriptive statistics
were generated to describe the study objectives and the profile of respondents.
Measures of variations were used to establish convergence of the responses.
Inferential statistics, including, model fitness (R
), ANOVA and regression
coefficients were used to test the study null hypothesis. Data was presented using
tables and bar charts. Majority of the participants (62%) indicated that
telephone banking had affected SACCOs financial performance to a great extent. A
significant number of participants (83%) indicated that internet banking had
affected financial performance of SACCOs to a great extent. A significant number
of participants (78%) in the study indicated the electronic funds transfer affected
financial performance to a great extent. The study findings show that telephone
banking (p=0.000) and internet banking (p=0.032) were statistically significant at
95%.The study concludes that there is a significant relationship between financial
innovations and the financial performance of SACCOs and that telephone banking
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and internet banking were found to be the main drivers of the financial
performance of SACCOs. The study recommends that more investment should go
into mobile and internet banking since the two drive profitability as opposed to
ATM banking.
