An evaluation of the role of diversification strategies on the revenue generation in savings and credit co-operative societies (Saccos) A case of saccos in Kisii sub centre, Kenya.

Abstract

The Co-operative societies in the country which makes up the co-operative sector boasts of a resource base of more than Kshs. 150 billion worth of investments) and nearly 60% of Kenyans reportedly benefit directly and indirectly from the co-operative movement -Khaemba 2007 speech on the co—operative day). The research sought to evaluate the role of diversification strategies on the revenue generation in SACCOs, Kisii Sub centre, Kenya. This research was based on twenty SACCOs that were stratified in terms of Farmers. Teachers. Church Affiliated and Multi—purpose SACCOs. Multi-stage sampling techniques -.\ ere used in collecting the data. Primary data was collected through structured questionnaire which had three sections A, B and C. The questionnaires were dropped and picked from the selected respondents after a period of two weeks and there was 88.33% respondent rate. Data was analyzed using descriptive statistics for part A and C of the questionnaire with a new of summarizing general information of the respondents and establishing significant difference in revenues due to diversification and before diversification respectively. Principle Component Factor Analysis (aggregation of factors) was used to analyze part B to establish Lhe Principle Component Factors that influence diversification. A Kaiser criterion of 60% was used to determine the factors. The research revealed that SACCOs have embraced ersification particularly FOSA, Hotel Business, M-Pesa, Retail Shop. Posho Mill. l\/licro~ Finance. Money Gram, Office Letting and Photocopying. Though SACCOs consider same factors before undertaking diversification, they attach different levels of importance to such factors. In addition revenue generated by the diversified strategies was significant and majority of the Finance Managers strongly supported the diversification. From the findings of this research there is need for further research in the same subject particularly in the remaining KUSCCO sub-centres and Nationwide based SACCOs.