The Influence of Process Innovation on the Organisational Growth of SACCOs in Nakuru City, Kenya

Abstract

Deposit-taking Savings and Credit Cooperative Organizations (DT-SACCO) in Kenya face intense rivalry in the financial sector, leading to lower relative growth compared to other financial institutions like banks. As such, the SACCOs will need to be innovative to survive in a concentrated competitive market compounded by the emergence of mobile money products covering the full spectrum of traditional financial services: sending money, payments, savings and lending. Among the innovative strategies that DT SACCOs can adopt is process innovation, which generates value for either internal customers, including employees or the actual organization itself. Hence, the study's primary objective was to evaluate the impact of SACCOs’ process innovation efforts on their growth in Nakuru City. This study was based on the dynamic capability theory. A descriptive research design was used for the investigation. The study focused on the branch managers of the 18 licenced deposit-taking SACCOs in Nakuru City. Census design was used for the investigation. Data for the study was collected using researcher-designed pilot-tested questionnaires. The data were analysed using descriptive and inferential statistical techniques with the aid of Statistical Package for Social Sciences (SPSS). Descriptive analysis used frequencies, percentages, means, and standard deviations, while inferential statistical analysis involved the use of Pearson's product-moment correlation coefficient. Regression analysis applied coefficient of determination and beta coefficients to determine the relationship between differentiation strategies and organizational performance. From the analysis, there was a moderate positive relationship (β = 0.477, p < 0.05) between process innovation and organization growth. It was concluded that process innovation had a significant influence on the growth of SACCOs. It was recommended that SACCOs should carry out process mapping exercises and utilize workflow management systems.