Abstract: The general purpose of the study was to study the influence of operational risk on the financial performance of deposit taking savings and credit cooperatives in Kakamega County. The specific objective was to find out the influence of financial systems on financial performance of deposit taking savings and credit societies in Kakamega. The study used a descriptive survey design. The population consisted of all the four; Invest and Grow, Weversity, Afya and Sukari deposit taking Saccos operating in Kakamega County. A semi-structured questionnaire was used to collect the data from a sample size of 56 respondents. The data from the respondents was coded on statistical package for social science (SPSS) software and analyzed by descriptive statistics; mean the standard deviation. The data was presented using frequency tables and bar graphs. Correlations, the statistical technique that can show whether and how strongly pairs of variables are related, was used to ascertain the relationship. The study revealed that there was a significant positive linear relationship between financial systems and financial performance of SACCOs in Kakamega County. The study concluded that SACCOs and other financial institutions must focus on the financial systems in minimizing their operational risks. The study recommended that management of SACCOs in Kenya should ensure that adoption and implementation of sound operational risk management practices, that there is appropriate credit risk policy in place, that there is appropriate risk-return tradeoff policy, that there existed favorable internal business environment and that appropriate credit risk limits are set as they impact on the financial performance of the SACCOs.
Keywords: Operational risk, financial systems, Symmetrical Information Theory.
Title: Influence of Operational Risk on Financial Performance of Deposit Taking Savings and Credit Co-Operatives in Kakamega County
Author: Makokha Philip Siminyu, Dr. Mukanzi Clive, Maniagi Musiega
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
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