Mediating Effect of Firm Size on the Nexus between Camel Rating Model and Financial Performance of Deposit Taking Savings and Credit Cooperative Societies in Kenya

Savings and credit cooperatives are of importance to developing countries due to their huge contributions on the national economy. The study sought to examine the mediation effect of firm size on the relationship between CAMEL rating model and financial performance of deposit taking SACCOs in Kenya. The study emanates from the Doctoral dissertation of the first author where the co-authors served as supervisors. Efficiency structure theory and working capital management theory were used. Panel regression analysis was used based on secondary data for the period 2013 to 2022. The study established that the mediation effect of firm size on the relationship between CAMEL rating model and financial performance of deposit taking SACCOs in Kenya was significant. Higher market value and consequently financial performance are linked to institutions with large firm sizes. It is therefore recommended that SACCOs should strive towards growing their total assets which will subsequently translate to higher profits and ultimately higher financial performance. The advantages of economies of scale of large institutions should be fully maximized so as to sustain higher financial performance of SACCOs. Keywords: CAMEL Rating Model, Firm Size, Financial Performance and Deposit Taking SACCOs