Asurvey into the causes of financial distress in co-operative societies in Nairobi

Abstract

At one time in the life time of every institution, there are high possibilities for experiencing financial distress. Consequently, corporative societies just like any other organization are not immune to these financial difficulties. The impact of these difficulties is critical as it can also result to the downfall of the co-operative society. Therefore, understanding the causes and the remedies for this financial distress could play a major role towards saving these vital institutions. Consequently, this research focuses on the causes of financial difficulties in the cooperative societies in the Nairobi area. The paper is divided into five chapters that help in achieving the main goal of the research. The first chapter introduces the corporative societies and their current status, the second chapter looks into the related literature and gives an in depth review of the causes of financial distress and how it could be overcome. The third chapter, provides a framework for the method used to conduct research, collect data and the mode of data collection and the type of data, the fourth chapter gives an analysis of the data collected which is presented in form of chats, table and figures and deduces a model that relates the relationship between the dependent and the independent variables. The last chapter gives a summary, conclusion and recommendations for further studies. The researcher concluded that the causes of financial distress can be traced from the internal factors that heavily rely on management of co-operatives and external factors that mainly surround the politics, governance and legislation. The researcher recommended that co-operative managers should be well qualified to take up their roles and that the government should develop more effective guidelines, ensure stable political environment and most importantly facilitate external audits of the co-operative to curb corruption guarantees continued survivor of co-operatives.