Managerial Capability, Funds Allocation Strategy and Financial Performance of Deposit Taking SACCOs in South Rift Region in Kenya

This paper investigates the effect of managerial capability and funds allocation strategy on financial performance of Deposit taking saccos in South Rift Region in Kenya. First, individual managerial characteristics explain a substantial part of financial performance. Independent variables have a significant effect on financial performance. Second, the study finds that funds allocation strategy has moderating effect toward financial performance. Third, turning to financial performance and its effect on protection, effective financial structure, asset quality rate of return, liquidity status and signs of growth of DTSs. PEARLS system influences the financial performance of DTSs. This reflects the association between managerial capability and funds allocation strategy towards financial performance. Data was analysed SPSS. The F-test, coefficient of determination, multiple regression and ANOVA test were used to determine whether there is a significant relationship among managerial capability, funds allocation strategy and financial performance. The daunting task of DTSs is not mapping to the competency of saccos managerial staff. It resulted in mismanagement of most saccos in Kenya. A legal framework relating to qualifications of managerial staff and Board of Directors should be put in place. This will go a long way in solving the prevailing problems of DTSs in Kenya.