| dc.description.abstract | Although SACCOs are established to help their members access financial services, they have not been able to meet their demands satisfactorily because of their low financial performance. Poor financial performance is influenced by the SACCOs' poor lending practices. In Siaya, the uptake of loan from SACCOs generally remains low as most of the consumers citing negative attitude arising from high interest rates, lack of sufficient knowledge on the lending terms. The purpose of the study was to determine the influence of loan lending practices on financial performance of selected Savings & Credit Co-operative Societies (SACCOs) in Siaya County. Specific objectives were to determine the influences of cost of borrowing, loan repayment period, and loan recovery process on financial performance of selected SACCOs in Siaya County.The study was pegged on credit risk theory and loanable funds theory. This study used cross sectional research design. The target population was 43 SACCOs in Siaya County. A sample size of 39 SACCOs was determined by using Yamane formula (1967). Sampling techniques comprised purposive and simple random sampling. Primary data was gathered by structured questionnaires administered personally by drop and pick approach. The data was analysed by descriptive statistics such as frequencies and percentages, calculation of means and standard deviations, as well as Pearson correlation and multiple linear regression analysis. The pilot test was conducted, on the questionnaire and necessary amendments made to enable respondents answer it without any difficulty. Major findings indicated a strong degree of positive correlation (r= .914) between lending practices and financial performance (profitability). R-square of .835 measured part of financial performance which was explained by the lending practices, approximately83.5% of the variation in financial performance (profitability) was attributed to variation in lending practices. The study therefore concludes that loan lending practices influence the financial performance of SACCOs. The study recommends that SACCOs to reduce the cost of borrowing so that increase profitability can be realized. Researcher proposes further research to be conducted in banking sector so that to ascertain the influence of lending practices on financial performance in the banking industry in Kisumu County. | en_US |
