International Journal of Science and Research (IJSR)

International Journal of Science and Research (IJSR)
Call for Papers | Fully Refereed | Open Access | Double Blind Peer Reviewed

ISSN: 2319-7064

Downloads: 129 | Views: 177

Research Paper | Accounting | Kenya | Volume 8 Issue 8, August 2019

Dividend Capitalization Strategy on Credit Accessibility among Savings and Credit Cooperative Societies in Kakamega County, Kenya

ODOTE Stephen Silvester | Dr. Aketch J. Roman

Abstract: Co-operatives are private institutions that play an important role in public resources mobilization to stimulate economic growth. It is estimated that 63 % of Kenya’s population participates directly or indirectly in co-operative based societies, thus contributing about 31 % of the total gross domestic product (GDP). The benefits include economic empowerment, wealth creation and employment. Competition from financial institutions has caused SACCOs problems with fund mobilisation; this causes them to diversify in areas ill prepared for. Some SACCOs have opted to get into commercial banking businesses that present risks to meet members’ credit needs. Therefore, the purpose of this study was to assess the dividend capitalization as a fund mobilization strategy on credit accessibility among SACCOS in Kakamega County, Kenya. The study was majorly guided by the resource mobilization and the pecking order theories. The research design used in the study was a descriptive survey. The target population was the management team (respondents), which is responsible for policy formulation. The team comprised twelve elected committee members and the top three senior employees of the selected SACCOS. Census method was used for the elected management committee and purposive sampling technique used in selecting the four SACCOS in Kakamega County as well as the top three senior most employees of the sampled SACCOS. The data was collected through open and closed ended questionnaire. The content validity was determined while the reliability of the research tool was established using the Cronbach Alpha. The data was analyzed using descriptive and inferential statistics. The study correlation analysis showed that there exists a significant positive and direct relationship between dividend capitalization and credit accessibility, R = 0.389, P < 0.01 with 99.0 % confidence level. In addition, it indicated that 15.1 % variation in credit accessibility is as a result of dividends capitalization, leaving 84.9 % to be accounted for by some other factors. Therefore, dividend capitalization strategy had significant positive effect on credit accessibility among SACCOS in Kakamega County. It was concluded that dividends capitalization strategy has significant influence on credit accessibility among SACCOS. The study recommends that the SACCO management team should formulate and employ dividend capitalization as one of its resource mobilization strategy to enhance their credit accessibility.

Keywords: Dividend Capitalization, credit accessibility, Kakamega County, Kenya

Edition: Volume 8 Issue 8, August 2019,

Pages: 1505 - 1512

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