The Impact of Deposit Level on Lending of Saccos Regulated by Sasra in Nairobi

Abstract

The objective of the study was to determine the impact of deposit level on lending of SACCOs regulated by SASRA. The study looked at the Nairobi based SASRA regulated SACCOs in an attempt to find out whether deposits level impacted on lending .The study tried to determine whether there any other factors that impact on lending apart from deposits level. The study was a survey of Nairobi based SACCOs that are regulated by SASRA for the period 2007 to 2011. Secondary data was collected from the financial statements of individual SACCOs and analyzed using SPSS and advanced MS Excel. The t statistics and F significance ANOVA were used to test the hypothesis. The findings revealed that deposit levels positively impacted lending of SASRA regulated SACCOs in Nairobi during the period under study. Capital and interest rates either positively or negatively influenced lending. This is consistent with findings of past similar studies that concluded that growth in deposit levels results in increased lending. This study was limited to SACCOs in Nairobi due to ease of access and recommends studies to be carried out to cover all other SACCOs were left out. Further, there is need to focus on regulations covering other players in the financial services sector such as banks and other microfinance institutions.