Abstract:
Risk management practices are one of the most important and
challenging issues in performance of Dairy Societies in Kenya. Making sure Dairy
Cooperative Societies develop, manage and implement a risk management system is
essential in streamlining the societies operations and minimizing unnecessary
financial leakages due to the effects of various risks. Lack of a homegrown and
internally developed risk management system that suits the operations of the
societies hampers the financial performance of Dairy Coo perative Societies. T he
study was restricted to investigating the effect of risk management practices on the
performance of Dairy Cooperative Societies in Meru County, Kenya. T he specific
objective of the study was to establish the effect of risk management practices on the
financial performance of Dairy Cooperative Societies. The study resorted to a
census of all the 72 Secretary Managers of the Dairy Cooperative Societies in Meru
County, whereas data was collected using a questionnaire. The descriptive research
design was adopted for this study. T he response rate was 88.88 per cent, while the
coefficient of determination indicated that the independent variable contributed to
67.9 per cent of the variability in financial performance of Dairy Cooperative
Societies as explained by R2. After running the regression model it was established
that the p-value and regression coefficients generated was as (β = 0.521 p =0.042).
This indicated that risk management practices had a positive and significant effect
on financial performance of Dairy Cooperative Societies in Meru County, Kenya.
