The Effect of Share Capital on Financial Performance: A Case Study of SACCOs in Western Kenya

This study investigates the effect of share capital on the financial performance of Savings and Credit Cooperative Societies (SACCOs) in Western Kenya. Using a descriptive survey research design, the study collected data from 159 respondents across 22 registered SACCOs in the region. The findings reveal a strong positive relationship between share capital and financial performance, with share capital explaining approximately 5.2% of the variation in SACCOs’ financial performance. Key factors influencing share capital growth include effective communication, competitive returns, and member involvement in decision-making. The study identifies challenges such as limited financial literacy among members and competition from other financial institutions. Recommendations for improving share capital management include prioritizing member education, leveraging technology for engagement, and enhancing collaboration among SACCOs. The research contributes to the understanding of share capital dynamics in cooperative financial institutions and provides insights for policymakers and practitioners in the SACCO sector.