Abstract:
Despite the existence of SASRA regulation, many SACCOs are experiencing
challenges related to risk management system. This study sought to investigate
risk prevention practices adopted by SACCOs in Kirinyaga County to enhance
their financial competitiveness and help them overcome the risk management
system related challenges. The specific objective of this study was to determine
the risk prevention practices employed by deposit taking SACCOs in Kirinyaga
County. The study is premised on Financial Theory. The study adopted a
descriptive research design that helped in describing the phenomena of risk
prevention practices in SACCOs. Information was collected from 23 SACCOs
operating in Kirinyaga County. Primary data was collected from the top
management of the SACCOs using a questionnaire. The study established a
positive and significant relationship between risk prevention practices and the
financial competitiveness of SACCOs within Kirinyaga County. The coefficient
of determination was at 83.1%, an indicator that the explanatory variable
explained more than eighty percent of variance in the financial competitiveness
of SACCOs in Kirinyaga County. The p-value and regression coefficient
generated after running the regression model for risk prevention practices was
(β= 0.471, p = 0.012). The study concluded that risk prevention practices plays
and important role in influencing the financial competitiveness of SACCOs. The
implementation of risk management strategies in all the SACCOs in order to
improve the financial competitiveness is recommended.
