Outsourcing and Performance of Savings and Credit Cooperative Societies in Nairobi, Kenya

Abstract

The purpose of the study was to establish the effects of outsourcing and performance of savings and credit co-operative societies in Nairobi, Kenya. The study was based on the following specific objectives: To establish the extent of service outsourcing by SACCOs, to establish the relationship between outsourcing and performance of SACCOs and to determine the challenges of outsourcing faced by SACCOs in Kenya. To meet the research objectives, the study targeted a sample size of 40 respondents from which 35 filled in and returned the questionnaires making a response rate of 87.5%. The target respondents were the Procurement and Finance Managers or their equivalents of each SACCO. The study used primary data that was collected through a selfadministered questionnaire that consisted of both open and closed ended questions that were designed to elicit specific responses. Data analysis was done using a Statistical tool for Social Sciences (SPSS) and was analyzed and presented the specific issues through coding and summarizing the responses of all the respondents. Regression analysis was also performed in establishing the relationship between outsourcing practices and performance of SACCOs in Nairobi County. The findings of the study indicate that the adoption of outsourcing practices will in the long run determine their survival as they seek to reduce operating costs, improve customer satisfaction and timely delivery of services to their clients, improved public relations, improved customer survey, improved field sales, improved paperless operations in the organization, availability and proper flow of information, improved staffing, recruitment and improved training. Flexible outsourcing practices through appropriate research efficiently helps the business to meet the changing needs as well as addressing the challenges arising from a dynamic global business environment such as lack of employee training and motivation, limited resources, lack of top management support and resistance to change. The researcher therefore recommends that the SACCO’s management teams need to embrace outsourcing initiatives to help them appreciate the direct impact of outsourcing. They should focus on both qualitative and quantitative aspects in their decision making and more sustainable outsourcing strategies integration across the group will yield synergies.