The deposits taking Savings and Credit Cooperative Societies have continued to play a critical role in Kenya's financial sector in terms of access, savings mobilization and wealth creation. Given the importance of the sector in economic growth, there has been considerable interest in their efficiency. In Kenya, DTS have been reported to have low efficiency, with the average efficiency being less than one. There is limited empirical literature to explain the inefficiency of DTS. In view of this, the study sought to establish the effect of asset quality on efficiency. The study was anchored on Asymmetric Information Theory. The study adopted positivist philosophy and explanatory research design. The target population comprised 110 DTS as at 2017.The study used secondary data that was collected from the audited financial statements for the period 2012-2016.Data was collected using a document review guide. Data Envelopment Analysis methodology was used to generate efficiency scores. Both descriptive analysis and inferential statistics which included panel Tobit regression was done and was aided by stata version 11. Descriptive analysis indicates that the mean of asset quality is above the required maximum by the regulator. In addition, asset quality had a statistically significant effect on efficiency. The study concluded that: increase in non-performing loans reduces efficiency. The study recommends that DTS Societies should develop credit administration strategies that reduce the amount of non-performing loans; a policy for credit information sharing to make it compulsory for Deposit Taking Savings and credit Cooperative Societies to share credit information.
The deposits taking Savings and Credit Cooperative Societies have continued to play a critical role in Kenya's financial sector in terms of access, savings mobilization and wealth creation. Given the importance of the sector in economic growth, there has been considerable interest in their efficiency. In Kenya, DTS have been reported to have low efficiency, with the average efficiency being less than one. There is limited empirical literature to explain the inefficiency of DTS. In view of this, the study sought to establish the effect of asset quality on efficiency. The study was anchored on Asymmetric Information Theory. The study adopted positivist philosophy and explanatory research design. The target population comprised 110 DTS as at 2017.The study used secondary data that was collected from the audited financial statements for the period 2012-2016.Data was collected using a document review guide. Data Envelopment Analysis methodology was used to generate efficiency scores. The study found that the DTS in Kenya have not achieved efficiency. The study recommends that SASRA should develop a merger policy to encourage the DTS to merge. The management should decrease staff costs and operating expenses by investing in advanced technological innovations in order to increase efficiency.
Digital transformations are transforming the economy and society in East Africa, and entrepreneurs need to leverage on these digital transformations to ensure the sustainability of their businesses. This chapter therefore seeks to examine the role of digital transformation on sustainability of entrepreneurship for the underserved communities in East Africa. The chapter adopts an interdisciplinary and pragmatic world view. There exist many challenges in East Africa which stifle the progress of digital adoption. For East African countries to exploit the potential of technology, they must develop the foundational building block of digital economy. Digital innovation contributes to the development of an ecosystem that revitalizes the digital economy by supporting new technology-based products and businesses. East African countries should ensure that the underserved communities receive basic education, strengthen, and integrate a multi-sectoral approach towards a regional digital and legal policy framework in order to encourage innovation and e-business.
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