Effect of Credit on The Financial Performance of Saccos in Kilifi County

The purpose of the study was to determine the effect of credit on the financial performance of SACCOs in Kilifi County. The study employed a descriptive research design to gather information on the credit factors that affect the performance of SACCOs in Kilifi County. The target population of this study was 174 active registered SACCOS in Kilifi County. The target population typically comprises all individuals or units that meet the study's criteria. The study sample comprised 122 savings and credit cooperative societies, selected from the total SACCO population in Kilifi County. Data was collected using primary techniques. The questionnaires were also posted on Google Forms and sent to respondents, who could complete them directly from their phones and personal computers. At the advanced level, multiple regression analysis was used to examine the relationship between the independent variable (credit) and the dependent variable (financial performance). The study found that credit had a statistically significant impact on the financial performance of Savings and Credit Cooperative Organizations (SACCOs) (t = 3.789, p = 0.000, < 0.05). Consequently, the present analysis rejects the null hypothesis, thereby establishing that credit has a substantial impact on the financial performance of SACCOs in Kilifi County, Kenya. The study results indicate that the financial performance of SACCOs in Kilifi County is significantly influenced by credit. The strong correlation between credit and financial performance suggests that as credit access increases, SACCOs' financial performance improves. Practitioners in the microfinance sector should focus on collaboration and knowledge sharing. Working together with policymakers, regulators, and other microfinance institutions can lead to more effective and efficient microfinance services. Practitioners should also incorporate social performance measurement metrics into their operations to assess the impact of their services on members' well-being. Responsible lending practices are highly recommended to prevent over-indebtedness among members and promote a sustainable lending portfolio. Practitioners should ensure that credit is extended to individuals who can reasonably afford it, avoiding the negative consequences of excessive debt.