Sacco’s Strategies and Member’s Savings in Deposit Taking Saccos in Nairobi County- Kenya

Abstract

Just like the case with all investments and other firms, Savings and Credit Co-operative Societies (SACCOs) in Kenya are investment with the target of maximizing their wealth. It is that wealth maximization and capital accumulation is a critical objective whenever SACCOs have chosen pushes for more savings from members. The purpose of the study was to conduct an effect analysis of savings and credit co-operative societies strategies on member’s savings in Sacco’s’ (Nairobi county- Kenya). Specifically, the study focused on the following research objectives; to establish the relationship between loan policies, member training and customer relationship management strategy on member’s savings in Sacco’s in Nairobi County. The study targeted the forty two licensed savings and credit co-operative societies in Nairobi County-Kenya. Specifically the study targeted the management of the Sacco’s, and clients of savings and credit co-operative societies in Nairobi County-Kenya. From the projected target population which was about 12,212 respondents. A purposive sampling technique was employed in this study. Then, simple random sampling procedure was then used to select about 50% of the Sacco’s management/staff targeted from the target population. Then purposively again a random sampling technique was employed to select at least two Sacco’s clients at each office visited from the 42 registered Sacco’s in Nairobi County. In analysis, Descriptive and inferential statistics were considered to conduct an analysis of data generated from respondents. The information obtained was presented through frequency distributions tables, evidence of percentages and the researcher categorized variables. The study found that loan policies, member training and customer relationship management strategy positively and significantly affected member’s savings. The study concluded that it is a SACCO policy to appraise loans based on members’ savings and ability to repay. However, a member needs to clear any outstanding emergency loan, if any, before applying for another. Training of members both employees and clients leads to increased job satisfaction and morale among employees, motivation, increased efficiencies in processes, resulting in financial gain, increased capacity to adopt new technologies and methods by clients, increased innovation in strategies and products and enhanced company image. Customer relationship management strategy enhances better customer service, CRM systems are useful in identifying potential customers, CRM data ensures effective co-ordination of marketing campaigns. The study recommended that loan policy should clearly communicate the strategic goals and objectives of the SACCO, as well as define the types of loan exposures acceptable to the institution, loan approval authority, loan limits, loan underwriting criteria, and several other guidelines. SACCO should train members on communications; because the increasing diversity of today’s workforce brings a wide variety of languages and customs. Customer service; because increased competition in today’s global marketplace makes it critical that employees understand and meet the needs of customers. Customer relationship strategy should aim at governing how to satisfy customers beyond developing good products and services, help retain existing customers to maximize efficiencies and reduce the cost of acquisition and ensure customer satisfaction and a memorable brand experience.