Influence of Firm Size on Performance of Deposit Taking Savings and Credit Cooperative Societies in Nairobi County, Kenya

Evans Vidija Sagwa    
Appolonius Shitiabai Kembu    


AbstractThe Savings and Credit Cooperative Societies (Saccos) in Kenya have made a tremendous contribution to national development which is responsible for about 45% of Gross Domestic Product and 31% of national savings and deposits. Deposit Taking Saccos (DTSs) have enabled cooperative societies to diversify their products and services in a highly competitive market. Those who patronize the services of DTSs have options of accessing similar services from other service providers like commercial banks and non-banking financial institutions that may enjoy economies of scale due to their size. However, some of the DTSs may be small in size which makes it difficult for them to leverage on size for wider coverage of their catchment market. Guided by Human Capital Theory (HCT) and the Resource-Based View (RBV) as the theoretical framework. The purpose of this study was to examine firm size as an important influencing factor on organization performance. The study adopted a descriptive design. The study was a census of the 42 DTSs operating in Nairobi County, Kenya. The target respondents were Chief Executive Officers and Human Resource Managers in the DTSs. Data was collected from 39 respondents using a questionnaire that was tested for reliability and validity. Data was analyzed using descriptive and statistical techniques. Cross-tabulation of the number of employees and organizational performance was done. Chi-square tests were also conducted. The findings of the study indicate that the DTSs with the highest number of employees performed higher than those with fewer employees. These findings suggest that organizations should pay more attention to firm size and leverage on the optimum size for competitiveness in the market.

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