The effect of financial innovations on credit provision by savings and credit co-operative societies in Kenya

Abstract

Policy makers have given considerable attention to innovations that have removed barriers to credit access to majority of Kenyans. This is as a result of poor credit worth assessments and unavailability of credit information which threatens credit access to people whose credit information cannot be effectively accessible or verified. This study was aimed at assessing the financial innovations that have facilitated improvement in credit access in SACCOs in Kenya. The study is an exploratory survey of deposit taking SACCOs in Kenya that were registered as at 31st December 2013. Primary and Secondary data was collected using questionnaires and reports from SASRA, the SACCOs regulator, where all the issues on the questionnaire were addressed. Descriptive statistics were used to analyze data. Furthermore, descriptions were made based on the results of the tables. The study found that financial innovations have played a key role in availing credit to members of Saccos in Kenya. The study established that there was strong relationship between advancement of credit and financial innovations through introduction of new products. The findings from the study will be important in identifying the challenges the SACCOs encounter that will have to be mitigated through financial innovations as arched in Kenya Vision 2030.