Strategic Factors Affecting Compliance with the Sacco Act of 2008 by Financial Co-operatives in Kenya: A Case of Nairobi County Sacco

Abstract

The aim of the study was to address the strategic factors that affect compliance with the SACCO Act of 2008 by Financial Co-operatives in Nairobi County. Despite the fact that SASRA regulations have been in operation for the last four years, the strategic factors that affect compliance with the Act of 2008 has not been established. The study adopted a census survey of 42 Financial Cooperatives. Data was collected using a questionnaire and analyzed using descriptive statistics with the aid of Statistical Package for Social Sciences software. Multiple regressions were used in testing the strategic factors affecting compliance with the SACCO Act of 2008 by Financial Co-operatives in Nairobi County. The study found that, ICT capacity of the SACCOS in Nairobi County are inadequate; The SACCOs in the county have not attained the required human resource capacity and 80% of the SACCOs have not fully complied with the Societies’ Act of 2008. The researcher’s conclusion and recommendations was that ICT capacity, corporate governance and human resource capacity were found to be important as far as compliance with the Societies’ Act number 14 (2008). These factors present challenges that hinder financial cooperatives from compliance. Therefore Sacco societies Act should be reviewed to ensure as many financial cooperatives are able to comply with the Act as possible in order to ensure that members deposits held in the current outfits are protected as the small and emerging Saccos endeavour to overcome the compliance challenges. The research recommends SACCO’s to establish a training program to enhance management capacity on compliance issues. Meanwhile the board of directors should initiate change management with an aim of setting realistic user expectations objectives and goals.