FACTORS INFLUENCING COMPETITIVE ADVANTAGE OF SAVINGS AND CREDIT COOPERATIVES ORGANIZATIONS (SACCOS) IN KENYA (Case study of Deposit Taking SACCOs in Nairobi County)

The researcher carried out research on the factors influencing competitive advantage of Savings and Credit Co-operatives (SACCOs) in Kenya: A Case study of Deposit taking SACCOs in Nairobi County. The SACCOs sector has grown tremendously in Kenya resulting to fierce competition and changing their strategies to stay ahead of the game. The factors analyzed were access to funds, operational risk management, saving mobilization and innovation. This study adopted a descriptive research design. The target population of the study comprised of 420 employees from the Deposit Taking SACCOs within Nairobi County. The researcher used stratified random sampling method to select the desired sample size of 120 respondents from the director SACCO officials and SACCO employees. Structured questionnaires were used to collect data. Descriptive and inferential statistics were used in the analysis of quantitative data collected by use of structured questions. The study found that most of the SACCOs confirmed that access to funds, operational risk management, saving mobilization and innovation affect competitive advantage. The study concludes that access to funds promote competitive advantage by ensuring the funds are available and accessible by its members. The study found that the SACCOs embracing operational risk management, there will be some effect on its competitive advantage as risk management has become key component of competitive advantage. The study also revealed that if the SACCOs adopt saving mobilization, there will be some effect on its competitive advantage that is in cases of defaulters, recovery isn’t easy hence performance of the SACCO is retarded. If the SACCOs embrace innovation, it will not enhance its competitive advantage. The study concludes that access to funds affect competitive advantage of the SACCOs if they make the financial services affordable and easily accessible. Operational risk management can enhance competitive advantage, if sstandardized reports can tract risks in an enterprise and hence improve the executives and directors focus in the provision of data to enable better decisions on risk mitigation. Savings mobilization can only enhance competitive advantage if there is proper administration of the funds besides severe punitive measures for debt defaulters and embezzlers. For the SACCOs to be successful and competitive through innovations, a cooperative needs at least to maintain a large volume of member transactions. In light of the findings, the study recommends that the SACCOs should focus more on mobile banking to have efficient funds accessibility to its members. The study recommends that SACCOs should have in place risk and internal audit team for enhancing financial control and management of risk. The study recommends that SACCOs should involve training activities where members can be informed of the benefit accrued to saving in Saccos the study recommends that new technology should also be well incorporated for the innovation to be sustainable. The study also suggests that further research be done on the factors affecting sustainable competitive advantage of SACCOs in Kenya.