The impact of front office Sacco activity on Sacco performance in Kenya; A case study of Meru South and Maara district in Tharaka Nithi County in Kenya

Njagi Gabriel Matumo¹, Kimani E.Maina², Ngugi Nahashon Njoroge³

^1,2,3JomoKenyatta University of Agriculture and Technology

gabrielmatumo@gmail.com, kimani_emaina@yahoo.com, nahangugi!yahoo.com

Accepted 22 August 2012

Abstract

While Savings and Credit Co-operative Societies (Saccos) are an autonomous Association of Persons united voluntarily to meet their economic and social needs, their performance has been affected by low capital base.  Their capital base is low, thus limiting loanable funds to members.   To cope with this problem, many Saccos have introduced Front Office Sacco Activity (FOSA), in order to strengthen their capital base and liquidity level.  FOSAs offer simple banking services to members/customers, thus improving their working capital. This study is meant to find out the impact of FOSA operations on Sacco performance in Kenya; A Case of Meru South and Maara Districts in Tharaka Nithi County. The Research Design was descriptive in nature. The intended population of the study was the three Saccos with Front Office Sacco activity in the two districts. The county has four SACCOs with FOSAs but one started operation with FOSA since inception. The researcher used Secondary Data in this study for a period of six years. This included three years before and after operating FOSAs.  Correlation analysis was used to analyze the data. The findings of the study revealed that FOSAs can improve the performance for Saccos.

Keywords: Sacco, FOSA, Performance and Capital Base