Diversification Expansion Strategies and Performance of Savings and Credit Co-Operative Societies in Turkana County, Kenya

Abstract

Studies in the Savings and Credit Co-Operative Societies (SACCOs) sector have recently received a lot of attentions globally and locally. The SACCOs have experienced growth and diversification in the range of products and services in the market. The purpose of this study was to establish the effect of expansion strategies and performance of SACCOs in Turkana County, Kenya. The study sought to establish the effect of diversification expansion strategies on performance of SACCOs. The study was anchored on the Resource Based Theory and Igor Ansoff‟s Theory. The research designs of the study were descriptive and correlational research designs. Target population was 234 respondents consisting of thirty-five (35) SACCOs managers and 199 Secretariat drawn from the 35 SACCOs in Turkana County. Purposive and stratified sampling techniques were used. The questionnaire was used as the data collection instrument. This study employed the Cronbach‟s alpha coefficient as a measure of reliability of research instruments at threshold of 0.7 and above. The study used construct validity of the instruments, and content validity to make structured changes for the purpose of improvement and refinement before embarking on the actual data collection process. Data analysis and interpretation was based on descriptive statistics as well as inferential statistics using SPSS version 22. Results of the study were that: diversification expansion strategies had a positive, linear and significant (p-value is less than 0.05)association with the performance of SACCOs. Diversification expansion strategies had 53.9% variations on the performance of SACCOs. It was concluded that as the company invests more and implements diversification expansion strategies, the performance of SACCOs would improve. Results showed that diversification expansion strategies were more implemented had more effect on performance of SACCOs than expansion strategies. It was recommended that the management of SACCOs should invest more and implement diversification expansion strategies these strategies had profound effect on the performance of SACCOs. Organizations should upscale investment in diversification expansion strategies since results from other studies do indicate that these strategies improve economies of scale of SACCOs if well implemented. The findings of the study would go a long way in helping the SACCOs in Turkana County to improve their performance through sound and robust strategic management strategies. The study will provide an opportunity for organizations, particularly SACCOs to understand and apply diversification expansion strategies in addressing financial performance challenges. The knowledge gained will be used to improve financial performance of SACCOs in Turkana County, Kenya.