EFFECT OF SERVICE INNOVATION ON PERFORMANCE OF DEPOSIT TAKING SACCOS IN WESTERN KENYA

Abstract

Deposit Taking SACCOs (DT- SACCOs) are the single largest providers of formal credit services second to commercial banks. The deposit taking SACCOS (DT-SACCOs) accept demand deposits from members and offer savings accounts similar those offered by the mainstream banking institutions. In order to maintain the good performance, ward off competition and respond to the ever changing market needs of their members, DT-SACCOs must continuously innovate. This research was carried out on one DT-SACCO whose offices were found in western Kenya. The objective was to find out the effect of New Service Concept on the performance of the DT-SACCO. This study adopted cross sectional research design. It targeted the SACCO’s nine departmental managers and one public relations officer. A census was conducted. Closed ended questionnaires were used to collect d ata. Interview was conducted to seek further clarification on issues. Quantitative data was collected and analyzed by SPSS version 22. Descriptive statistics was computed to assist in describing and interpreting data. The findings of the study indicated that service innovation had contributed to performance of the SACCO by nearly 68%. This study contributed to knowledge in the field of service innovation and strategic management. The researcher recommended that DT-SACCOs should embrace variations in new service concepts in order to achieve customer satisfaction, loyalty and eventually improve performance.