THE INFLUENCE OF INTERNAL CONTROLS ON THE PERFORMANCE OF DEPOSIT-TAKING SACCOS IN KIAMBU COUNTY, KENYA
Abstract
Purpose: SACCOs play a pivotal role in the economy and the financial landscape, particularly in empowering individuals and communities through collective savings and access to credit. This research paper investigated the influence of internal controls on the performance of Deposit-Taking SACCOs in Kiambu County, Kenya.
Problem Statement: Given the increasing number of SACCOs facing deregistration due to poor performance, the study aimed to deepen the understanding of how internal controls affected SACCO performance.
Methodology: A descriptive research design was adopted, focusing on all 13 Deposit-Taking SACCOs registered with SASRA as of December 30, 2022. Data was collected from the management team using semi-structured questionnaires and analyzed through multiple linear regression.
Results: The unstandardized coefficient for internal controls was B = 0.525, with a standard error of 0.092. The standardized coefficient was Beta = 0.555, and the t-value was 5.711, with a significance level of p = 0.000. This p-value indicated a highly significant positive impact on SACCO performance. The significance levels (p-values) confirmed that internal control was critical to enhancing performance outcomes, highly significant at p < 0.001. The results revealed a positive and significant effect of internal controls on SACCO performance.
Conclusion: This finding emphasized the necessity for SACCOs to prioritize and strengthen their internal control systems to enhance operational effectiveness and success.
Recommendations: The study recommends that the policymakers and government agents develop models that enhance corporate governance while the regulatory bodies were advised to enforce stringent standards for internal controls and facilitate training programs tailored for SACCO management to enhance internal controls practices.
Keywords: Internal Controls, Deposit- Taking Saccos, performance
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