Impact of commercial banks on financial performance of Saccos in Kenya

SACCOs operate in financial service industry where today competition for customers is particularly fierce. Therefore this study sought to investigate how competition has impacted on the savings and credit cooperatives financial performance since the liberalization from 2003to2008 when cooperatives were set free to run their own affairs. The study adopted survey technique design with a target population selected from SACCO members and management staffs. Data was collected by the questionnaires which were administered to the respondents. The study used descriptive and inferential statistics to analyse the collected data, which were presented in tables of frequency distributions and figures. The study revealed that Mwalimu SACCO had not been grossly affected by the loans offered by the commercial banks. However, loans granted by the SACCO significantly reduced between the year 2004/2005. This shift did not reflect a proportional change in SACCO share capital.The individuals have benefited from the competition, the study revealed that, Mwalimu SACCO members had benefited a lot as a result of the on-going competition between commercial banks and SACCOs.