The Effect of Outsourcing of Accounting Services on Financial Performance of Deposit Taking Savings and Credit Cooperatives in Nairobi County

Abstract

The purpose of the study was to explore the effects of outsourcing of accounting services on performance of deposit taking SACCOs in Nairobi County. To satisfy the research objective, the study population was the 42 deposit taking SACCOs in Nairobi in Nairobi County. The data was collected using secondary data collection mode, by use of financial performance reports, journals and past studies. The data collected was analyzed using descriptive statistics and presented using tables. SPSS (statistical package for Social Sciences) version 22 was used in analyzing data. Regression analysis was also performed in establishing the relationship between outsourcing practices and performance of SACCOs in Nairobi County. The regression analysis revealed that outsourcing, liquidity and Managerial quality do not significantly affect the performance of SACCOs in Nairobi County. The researcher therefore recommends that SACCO’s management be educated on the need to have outsourcing in SACCOs operations and come up with clear outsourcing strategies that will ensure that the benefits of outsourced services surpasses cost. SACCOs should also use bank and other financial institutions to benchmark their outsourcing practices, identify the gaps and come up with strategies of overcoming such gaps.