Financial Innovations and Financial Performance of Deposit-Taking Saccos in Kenya

Financial innovation can be considered to be one of the crucial determinants for the performance of an organization. Various financial institutions have adopted various ways to enhance competition from other financial institutions and enhance their profitability in the market. In Kenya, SACCOS are noted to be the main drivers of the economy. They offer quick services such as quick and flexible loans to individuals seeking finance from micro-institutions rather than commercial banks. This study sought to investigate the effect of financial innovation on the financial performance of DT-SACCOS operating in Kenya. The target population of the study was the 69 DT-SACCOS from where 49 were used based on data availability. Primary data was gathered from operational managers through self-administered questionnaires after a pilot test is conducted to test the validity of the questionnaire. The data collected was condensed and analysed descriptively using the mean and standard deviation and inferentially using correlation and regression analyses. The findings of the first objective reveal that Institutional financial innovations have a statistically significant effect on the financial performance of DT-SACCOs in Kenya; Financial Products Innovations has a statistically significant effect on financial performance of DT-SACCOs in Kenya; Financial Process Innovations had a statistically significant effect on the ability of DT-SACCOs in Kenya to maintain their financial performance; a demonstrably beneficial impact that Financial Process Innovations has on the long-term financial performance of DT-SACCOs in Kenya.