Drivers Of Financial Performance Among Primary Marketing Co-Operatives In Nyeri County Kenya

Abstract

Approximately 63% of the Kenyan population draws their livelihood directly or indirectly from co-operative based activities. Kenyan Marketing Co-operatives provide opportunities for employment, resource mobilization and suitable structured development all aimed at reduction of poverty levels and impacting positively on the lives of people. The above goals are greatly hampered by the myriad of challenges faced by Primary Marketing Co-operatives resulting to slow growth, underperformance and ineffective service delivery. This study therefore sought to establish the drivers of financial performance among Primary Marketing Co-operatives in Nyeri County. The specific objectives of the study were to examine how members characteristics, staff characteristics, commodity characteristics and market characteristics influence financial performance of Primary Marketing Co-operatives in Nyeri County. The study employed four theories that included Agency Theory, Stewardship Theory, Stakeholder Theory and Resource Based Theory. The study took a descriptive research design. Census was done where all the Secretary Managers from 44 Primary Marketing Co-operative Societies in Nyeri County were the respondents. A self-administered, questionnaire was used to collect data from the target respondents. The study achieved a response rate of 79.5%. Data analysis was conducted using statistical package for social sciences (SPSS) to generate descriptive and inferential statistics. Frequencies and percentages were generated from the data and presented using frequency distribution tables while linear regression analysis was done to establish relationship of each parameter of the independent variables in the study. The data was tested for normality, linearity and multicolinearity using normal Q-Q plot, correlation coefficient (r) and Variance Inflation Factor (VIF) respectively. A bivariate linear model was used to assess the influence of each Independent Variable on the Dependent Variable. Multiple Linear Regression was used to investigate the overall model fitness of the study variables. Results for model fitness (R2), ANOVA statistics and regression coefficient were generated and used to interpret the study results. The study findings revealed that members’ characteristics, commodity characteristics and market characteristics has positive and significant effects on financial performance of Primary Marketing Co-operatives. Staff characteristics have a positive but statistically insignificant effect of financial performance of Primary Marketing Co-operatives. The study recommends that Primary Marketing Co-operatives should invest on member characteristics, commodity characteristics and market characteristics to improve their financial performance. It also recommends that although the staff characteristics are statistically insignificant they should also be enhanced because they also have a positive effect on financial performance.