EFFECT OF DIVERSIFICATION STRATEGY ON PERFORMANCE OF SAVINGS AND CREDIT COOPERATIVE SOCIETIES (SACCOS) IN THARAKA NITHI COUNTY, KENYA

Abstract

Many enterprises adopt diversification strategy for the sole purpose of expansion and growth. The success of the diversification of an enterprise mainly depends on the choice and implementation of a strategy. Choosing an organizational structure that fits the type of diversification strategy used is fundamental to improving financial performance. This study established the effect of diversification strategy on performance of Sacco’s in Tharaka- Nithi. The studied population was 47 registered Sacco’s in Tharaka-Nithi according to SASRA Act 2010, with a sample size of 47 chairpersons of SACCOs. It adopted descriptive survey research design and data was collected through administered questionnaires to the respondents. Data was subjected to simple and multiple regression analysis using SPSS version. Diversification strategy was 3.62, indicating that the respondents agreed with the statements regarding adoption of diversification strategy in their SACCOs and if properly implemented, diversification strategy increased sales volumes and improved SACCO performance. There were increased products and services range offered by the SACCOs, reduced costs of transactions and increased customer base.