Analysis on Effect of Risk Rentention on Performance of Savings and Credit Cooperative Societies in Nakuru County, Kenya

Abstract

Savings and Credit Co-operatives Societies (SACCOs) are in the business of safeguarding money and other valuables for their members besides providing loans and offering investment financial services. Credit creation is the main income generating activity for the SACCOs. But this activity involves huge risks to both the lender and the borrower. The researcher carried out this study to establish the effect of risk retention on performance of SACCO's in Nakuru County, Kenya. This study adopted descriptive survey research design. The target population of this study was 165 credit, finance and management staff working with Saccos in Nakuru County. To draw the 63 study respondents from the targeted population, simple random sampling method was utilized. The data collection instrument used in the study was questionnaires. The statistical tool for the analysis was Statistical Package for the Social Sciences (SPSS) version 25. Presentation was done in form of tables. It was concluded that risk retention has a positive effect on performance of Saccos. The study also concluded that identifying and retaining risk plays the most important role in the performance of an organization. Therefore, risk retention is a major starting point in the risk management process. The study also concluded that, in the Sacco's, there are internal staff members who are qualified and are in a position to determine when to retain the risk and when not to. The Sacco distribute the risk to its members thus preventing it from directly affecting the business, this has enabled the Sacco's to relive their goals and objectives.