Members’ Characteristics and Financial Performance among Primary Marketing Co-Operatives in Nyeri County Kenya

Abstract

Financial performance deals with measuring the results of a firm’s operations which is reflected in its profitability as well as return on investment. Financial performance of Primary Marketing Co-operatives is influenced by many factors both within and outside the respective Co-operatives scope. 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 examine how members’ 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 80%. 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 variable in the study. The data was tested for linearity using correlation coefficient (r) and multicolinearity using Variance Inflation Factor (VIF) respectively. A bivariate linear model was used to assess the influence of members’ characteristics on financial performance of Primary Marketing Co-operatives. The study findings revealed that members’ characteristics has positive and significant effects on financial performance of Primary Marketing Co-operatives. The study recommends that Primary Marketing Co-operatives should focus on enhancing positive aspects of member characteristics in order to improve their financial performance