Effect Of Risk monitoring on the Financial Performance of Deposit-Taking Saccos in Kenya
Adelaides Simiyu · Mary Nelima · Umulkher Ali
International Journal of Research in Business and Social Science · 2026 · Vol. 15 / Issue 6 · 48-56
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Abstract
Risk monitoring has become increasingly important in enhancing the financial performance of financial institutions by facilitating the early detection of risks, strengthening internal controls, and improving operational efficiency. However, empirical evidence on its effect remains inconclusive, particularly among Deposit-Taking Savings and Credit Cooperative Societies (DT-SACCOs) in Kenya. This study examined the effect of risk monitoring on the financial performance of Deposit-Taking SACCOs in Kenya. The study was anchored on Risk Management Theory and the Basel Framework and adopted a positivist research philosophy and a causal research design. A sample of Deposit-Taking SACCOs licensed by the Sacco Societies Regulatory Authority (SASRA) was selected using stratified random and purposive sampling techniques. Primary data were collected using structured questionnaires, while secondary data were obtained from SASRA reports and audited financial statements. Risk monitoring was measured using monitoring tools, surveillance, risk tracking, and risk communication, whereas financial performance was measured using the reverse-coded operational cost ratio. Descriptive statistics and simple linear regression were used to analyze the data. The findings revealed that risk monitoring had a positive and statistically significant effect on financial performance (β = 0.803, p < 0.001), explaining 54.8% of the variation in financial performance (R² = 0.548). The study concludes that strengthening continuous risk monitoring enhances operational efficiency and financial sustainability.
Keywords: {'name': 'Risk Monitoring, Financial Performance, Deposit-Taking SACCOs, Operational Cost Ratio, Risk Management Theory, Kenya.'}
Authors & affiliations
Adelaides Simiyu
Affiliation not supplied
Mary Nelima
Affiliation not supplied
Umulkher Ali
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