Research 2023 2

enactment of the Sacco Legislation.
The legislation aims at ensuring that members‟ savings are safe

p p p p p p p p p p p p p p
p and sound, and in effect result in requisite confidence vital for any financial intermediary. During
p the 7th Africa Sacco Congress (Co-operative Digest, 2006), it was observed that in Kenyathe Sacco
p p p p p p p p p p p p p p p
p sector was estimated to be growing at the rate of Ksh. 13 billion or USD 949 Million annually. It
p p p p p p p p p p p p p p p p p p
p was further noted that the fast phenomenal growth was being experienced without corresponding
p p p p p p p p p p p p
legislation which had in turn exposed members‟ funds to unprecedented risks. The danger, it was
p said, is even greater for those Saccos taking deposits from their members. The congress further
p noted that no information gap should be left in order to minimize wrangles and that Saccos must
p p p p p p p p p p p p p p p p
p embrace new technology in order to grow and remain competitive. The Sacco legislation (Kenya
p p p p p p p p p p p p p
p Gazette Supplement No.98 (Acts No. 14)) has since been enacted as a result of which the Sacco
p Regulatory Authority (SASRA) was established. Sasra has the mandate of regulating, supervising
p p p p p p p p p p p
p and Licensing Sacco societies that are deposit taking. Deposits taking Saccos are Saccos that
p operate front office service activity (FOSA) just like banking institutions. Currently, Sasra has
p licensed 123 Sacco societies in Kenya to carry out Deposit – Taking business (Sasra, 2013).
According to the annual Report of the Ministry of Co-operative and Marketing – NairobiProvince
p (2009/2010), growth was noted in the number of active co-operatives from1,240 to 1,349,
p membership from 617,062 to 700,303; share capital/deposits rose from Sh.75,353,436,368 to sh.
p 84,417,038,509. Growth was also noted in turnover from Ksh.11,160,311,834 to Ksh. p p p p p p p p p p
p 13,207,816,387; loans with members from Ksh. 51,402,497,028 to Ksh. 87,253,704,361. Societies
p p p p p p p p p p
p with Fosas increased from 34 to 38, while the number of employees grew from 1974 to 2138.
p Societies that had computer hardware and software increased to 318 from 184. The annual report
p noted that the co-operative movement in the province was growing in every aspect as
4
indicated by the statistical information. The information related to all four (4) regions in Nairobi
p then, namely, Nairobi North, Nairobi East, Nairobi West and Westlands. Currently, the province
p has since been split into nine District comprising Starehe, Kamukunji, Kasarani, Embakasi,Njiru,
p Makadara, Langata, Westlands and Dagoretti. The research will carry out a survey of Dagoretti
p District which stretches all the way from Waithaka through Kilimani up to Upper Hill that touches
p the CBD, to assess the factors affecting the growth of co-operatives in this District.
1.2 Statement of the Problem p p p
Whereas p the p future p of p the p co-operative p development p in p a p liberalized p economic
p environmentseems bright, the challenge is how to inculcate the business virtues in the less adapted
p co- operatives to spread the benefits to a wider population in the country (Wanyama, 2008). The co-
p operative movement in Kenya has become a success story mainly in the areas of loans
p disbursement but continues to miss opportunities in the use of modern information Communication
p technology thus making it necessary for it to refocus and re-assess its capacity not just to mobilizing
p financial resources further, but also to manage them well for faster economic growth (Gunga,
p 2008).
The Ministry of Co-operative Development Investment Policy (June 2008), a policy document on
p investment is a set of decisions to deal with long-term objective of sustainable and a profitable co-
operative sector. Investments in this case by co-operatives meet the equity objective in relation to
p income distribution, proper financial resources utilization and efficiency objective in terms of
p increasing national income and human capital development. In this respect, the co-operative
p investment policy is part and parcel of national policies as stated in ERS, SRA, and Vision 2030
p among others. As per the co-operative Society Management and Prudential Guideline Manual
p (May 2008), there is need to entrench performance based culture in the

5
management of co-operative societies. This can be based on financial perspective, business process
p perspective, and learning and growth perspective.

p p p p p
As highlighted in the background, the fast phenomenal growth of Saccos in Kenya was being
p experienced without corresponding legislation which had in turn exposed members‟ funds to
p unprecedented risks (Co-operative Digest, 2006). The Sacco Regulatory Authority (SASRA)
p p p p p p p p p
p information site indicates that Kenya has mobilized 210 billion shillings and that it controls 67% of
p the total assets and 62% of the total deposits for the entire continent (Internet, 2013). Sasra however
p observes despite the rapid growth that has seen 218 Saccos out of the 5,544 registered Saccos taking
p deposits from members, there are challenges that need to be addressed. They observed that Saccos
p face challenges of weak legislation, low uptake of information technology and low level of
p professional skill development in management in both senior and junior staff. They also indicate
p competition from the mainstream commercial banks and lack of institutional capacity
p p p p p p p p p p
p development. The research endeavored to assess what contributes to the growth of Saccos and
p strategies that Saccos can adopt, especially in Dagoretti District, that contribute positively to
p viability and sustainability of the co-operative enterprise. This research was therefore to assess the
determinants of growth of Saccos in Dagoretti District.

p p p p p p p p
1.3 Research Objectives p
General Objective of the Research

p p p p
The Objective of this research was to assess the determinants of growth of Saccos in
Dagoretti District.
p p
Specific Objectives of the Research

p p p p
1. To assess how membership common bond affect growth of Saccos in

p p p p p p p p p p
p DagorettiDistrict p

Research 2023 2

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Research 2023 2

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enactment of the Sacco Legislation.

The legislation aims at ensuring that members‟ savings are safe

p 84,417,038,509. Growth was also noted in turnover from Ksh.11,160,311,834 to Ksh. p p p p p p p p p p

1.2 Statement of the Problem p p p

Whereas p the p future p of p the p co-operative p development p in p a p liberalized p economic

p (May 2008), there is need to entrench performance based culture in the

p perspective, and learning and growth perspective.

determinants of growth of Saccos in Dagoretti District.

1.3 Research Objectives p

General Objective of the Research

Specific Objectives of the Research

1. To assess how membership common bond affect growth of Saccos in

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