Financial Innovation and Financial Sustainability of Self-help Groups in Kisumu County, Kenya

Abstract

Self-help groups have grown from welfare groups to investment groups, while some transition to Savings and credit cooperative societies and banks. Despite being instrumental, self-help groups in Kisumu County continue to fail due to factors associated with financial resources and management. They face financial constraints, which are also anchored on unaware opportunities, limited trainings, and limited access to financial support. Lack of information regarding available technological advancement and credit facilities have also contributed to the failure of these groups. There is a need to study the relationship between the increasing technological advancement in relation to finances and their effect of sustainability of the self- help groups. This research study considered innovation in relation to electronic money transfer, internet banking, automated teller machines (ATM) and mobile loans. These were studied in thet to their effect of sustainability of self-help groups the indicator being consistent internal income. The objective of the research study was to determine the relationship between financial innovation and financial sustainability among Self-help groups in Kisumu County. A self-administered paper questionnaire was used to gather primary data for purposes of having a deeper understanding of influence of financial innovation on the sustainability. There are 2,843 registered self-Help groups in Kisumu County. The researcher used Fisher et al model to calculate a sample size and a total of 385 self-help groups were used in this study. The researcher conducted a statistical analysis using SSPS 21.0 software. Findings from the analysis revealed that financial innovation had an influence on the financial sustainability of these groups. From the study, it was evident that some innovations had a positive effect on the sustainability therefore self-help groups should embrace them in their transactions. They should utilise the use of electronic mobile transfer and ATMs to reach sustainability. This study failed to include all innovations due to time and resource constraints. The researcher therefore recommends to other researchers to further investigations that will be all inclusive