IntroductionThe Kenya financial sector comprises players from banking industry, micro finance institutions, capital markets, insurance companies, mutual funds and development finance institutions seeking to gain competitive advantage over each other (CBK, 2007). Savings and Credit Cooperatives (SACCOs) form part of these financial institutions. Cooperative society is an independent association of persons united voluntarily to meet their common economic, cultural needs and aspirations; cooperative society is formed to pool scarce resources, eliminate the middlemen and achieve a common goal or interest (Republic of Kenya, 2008). Credit cooperatives are formed with the purpose of providing short-term loans and encouraging the habit of savings among members. Members of these organizations benefit from favorable terms catered to their needs as compared to other large financial institutions like commercial banks (Singla, 2008). The Deposit Taking Sacco Societies (DTSs) is part of the larger SACCO sub-sector in Kenya which comprises the deposit taking and the nondeposit taking Sacco Societies. The no deposit taking segment is composed of those Sacco Societies whose business is limited to mobilization of deposits (non-withdraw able) for purposes of lending to members. The deposits are nonwithdrawable in that they may be used as collaterals for loans only and can only be refunded upon the member's withdrawal (Sacco supervision annual report, 2014). Deposit Taking SACCOs (DTS) offer various basic savings and credit products and provide basic banking services (demand deposits, payments services and channels such as quasi banking services commonly known as ATMs), Front Office Service Activities (FOSAs) are licensed and supervised under the Sacco Societies Act of 2008 by the Sacco Societies Regulatory Authority (SASRA) (Kenya Financial Stability Report, 2010).According to Karanja (2015), SACCOs are financial institution whose main objectives are provision of savings and lending services to its members. Lending services are considered to be one of the major functions of any SACCO apart from saving since most of the SACCOs' earnings come from interest income. Lending services can be carried out if and only if as a SACCO you have specific laid down procedures and policies to be followed in giving out credit. This will determine who is eligible to access the credit services and who cannot access them. The procedures and guidelines that govern this process are known as Lending policies.Observations made by Ismail and Panni (2009) conclude that the financial industry has become one of the highly competitive industries with SACCOs not only competing among each other but also competing with banks and other financial institutions. Most credit products are easy to duplicate and SACCOs provide nearly identical services. The only way they can distinguish themselves is on the basis of their lending policy. A rational customer will always opt for favorable lending conditions and therefore a SACCO has to factor in the anticipations of the ...
The choice of financial structure and financial management has a greater effect on the financial performance of most firms in the world and in particular Kenya. While most firms try to find a solution to balancing both, financial structure choice and its impact on financial performance remains a greater dilemma to all small and medium enterprises in Kisii County. This was a descriptive survey and questionnaires were used in collecting data from the respondents. Random sampling was used as the general sampling technique with the aid of the Yamane’s formula to select 109 SMEs to participate in the study from a target population of 150 SMEs in Kisii Central Sub-County. Statistical package for social sciences (SPSS version 23) was used to analyze both qualitative and quantitative data that was collected during the study. The owner controls the business and enjoys profits whenever it’s high and bears the risk alone. It does not entail any charge. This therefore shows equity capital forms higher proportion of financial structure hence has a significant effect on financial performance of SMEs. From the study retaining earnings was well appreciated irrespective of not having a significant effect on financial performance due to challenges of raising it. It stands a chance of being the best source of finance for expansion because it is the cheapest and painless method of raising additional capital. Management of SMEs should ensure that the financial structure of the firm is always at optimum. The firm cannot only survive on equity capital due to its low risk, also cannot wholly depend on debts due to high risk, more so retained earnings is only realized after making profit
IntroductionAs stated by Ataro et al., (2016), collection of revenue is a vital source of income to the government. It authorizes the government to obtain resources that are not subject to obligations and that public authorities use to strengthen its economy (Ngotho & Kerongo, 2014). Basically, high performance in tax collection is imperative for improving the effectiveness of aid transfer and better county governance. However, researches and other published journals as noted by Balunywa (2014) have established that various governments encountered solemn challenges in performance while collecting revenue, where governments can't gather adequate funds to cover their budget assumptions. As per Makokha, Alala, Musiega and Manase (2014), the county economic growth, development and improved services rise up out of appropriate financial management and collection of revenue at the county level.For a long time, tax collectors did not transfer all the cash they collected to the County Finance Bureau (Ngotho & Kerongo, 2014). The impact could prompt a greater loss, which would prevent country economic growth, development, and better service delivery (Mutakha, 2011; Namoit, 2012). To attain the financial goal of the county and payments
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