Vol. 3, Issue 9 (2017)
The influence of liquidity of a portfolio on the financial performance of SACCOs in Kenya
Author(s): Achieng Irene Ochieng, Dr. Jared Bogonko, Robert Simiyu
Abstract: Kenya is among the leading countries in Africa that command a large co-operative movement. However, the performance of cooperatives is often a factor of many aspects, both internal and external to the organizations. The purpose of the study was to assess the relationship between investment portfolio management and financial performance of savings and credit cooperatives in Eldoret, Kenya. Based on the study, this paper examines the influence of liquidity on the financial performance of SACCOs in Eldoret town, Kenya. The study was guided by the Modern portfolio theory. Correlational research design was used in the study. The target population comprised 135 SACCOs from which stratified and simple random sampling techniques were used to obtain a sample of 19. Questionnaire and document analysis guides were then used to collect the research data. The collected data was analyzed using both descriptive and inferential statistics and presented using charts and tables. Multiple regression model was used to show the relationship between investment portfolio management and SACCO performance. The results showed that there was a significant relationship between liquidity of portfolio and financial performance of SACCOs in Eldoret, Kenya. Liquidity not only helps the SACCOs ensure that the business always has a reliable supply of cash close at hand, but it is a powerful tool when it comes to determining the financial health of future investments as well. The study recommends that SACCOs should concentrate more on portfolio management in order to realize improved financial performance.