Corporate Social Responsibility Strategy and Financial Performance of Deposit Taking SACCOs in Kenya

Abstract

It is imperative that a firm operates in an ethical and sustainable way, deals with its environmental and social impacts for it to remain competitive in a dynamic market place. This study sought to establish the relationship between Corporate Social Responsibility strategy and the financial performance of deposit taking Savings and Credit Co-operatives societies in Kenya. The SACCO subsector is part of the Kenyan Co-operative sector comprising of both financial and non-financial cooperatives. Saving and credit co-operative (SACCO) are the financial cooperatives. They are an important part of the financial sector in Kenya, providing savings, credit and insurance services to a large portion of the population. Stakeholder management is critical in creating trust and confidence in key stakeholders. It has been argued that CSR has an indirect influence in determining whether or not a company is or remain successful or not. Descriptive research method and inferential analysis was used in this study. Questionnaires ware used to collect primary data. Pilot study was carried out to check on the reliability and validity of the instrument and a Cronbach’s Alpha of 0.915 was obtained. Data was collected from a sample of 54 Deposit taking SACCOs out of a population of 180 licensed DTS. This made a sample of 130 respondents. Data was then edited in the field to clean it up and processed using descriptive analysis and multiple regression analysis performed to determine the relationships between the stakeholder generic strategies and performance of SACCO societies. Results showed that CSR strategy has positive relationship with performance of deposit taking SAACOs. The research contributes to both stakeholder management and CSR theories by supporting reports of previous studies that stakeholder management strategies have positive relationship with SACCO societies’ performance. It is advisable for managers to be proactive in stakeholder management and to adopt CSR as a strategy to enhance various relationships and financial performance of their SACCOs