Open AccessFinancial Engineering and Financial Performance of Deposit Taking Savings and Credit Co-operative Societies in Kenya.
Author(s) -
Charles Kiprotich,
Zipporah Onsomu
Publication year - 2021
Publication title -
journal of finance and investment analysis
Language(s) - English
Resource type - Journals
ISSN - 2241-0988
DOI - 10.47260/jfia/1012
Subject(s) - product (mathematics) , financial services , finance , sample (material) , business , financial engineering , engineering , economics , mathematics , chemistry , geometry , chromatography
The study explores the effect of financial engineering on financial performance ofdeposit taking Savings and Credit Co-operative Societies (SACCOs) in Kenya.Population constituted of 163 SACCOs and a sample of 45 was considered. Theresults depicted that SACCOs have adopted financial engineering practices in threeforms: product engineering, process engineering and financial solutions engineering.In terms of their effect on performance, only process engineering was found to havea positive and significant relationship with financial performance. Productengineering and financial solutions engineering were found to have a positive butinsignificant relationship was obtained. The study recommends that SACCOSshould adopt financial engineering practices so as to improve their performance.More focus should be on process engineering. As such, SACCOs should automatetheir operations, adopt paperless services, use mobile banking services platform,use electronic funds transfer and install ATMs so as to improve their performance.In terms of control variables, the amount of loans were found to positively andsignificantly influence financial performance. As such, SACCOs should strive toderive products that can increase their level of loans.Keywords: Financial engineering, Financial performance, SACCOs, Kenya.