The role of savings and credit cooperative societies (saccos) in financial intermediation in Nairobi county.

Abstract

Financial intermediaries’ bear risk on behalf of investors by investing their savings across various sectors of business. They transform risk-by-risk spreading and risk pooling; they can spread risk across a range of institutions. The most important economic function of financial intermediaries is to enhance mobilization of savings and provide loans to its clientele. The objectives of the study were; i. To determine the strategies used by Sacco’s to mobilize savings and to enhance the saving culture ii. To establish the role of Sacco’s in encouraging borrowing and influence loans provisions to enhance the investment culture in its members? Structured questionnaires to the administrators and Sacco members were administered in order to collect responses to the above questions. The study established that embracing cooperative societies can bring immense benefits to individuals and the entire community as a whole. The study therefore concluded that ignoring the role of Sacco’s as a financial intermediary in this modern environment will be detrimental in the economic development of any economy due to the immense financial resources that Sacco’s currently control and the ever increasing membership day by day in the formal and informal sectors of the economy.