2.3.3 Innovation and Sacco Growth
Intensified competition between SACCOs as well as allowing members to easily compare offers provided by different SACCOs has heightened the rate of member switching to other service providers. In its widest sense, innovation is considered to be anything that is new to a business or as comprising new products and processes and significant technological changes of products and processes (Hine & Kapeleris, 2006). They add that innovation has been implemented if it has been introduced on the market or used within a production process. There are five types of innovation, namely, introduction of a new commodity; a new production method; opening up of a new market; change in source of supply; and re-organization …show more content…
From the study, it was also noted that due to the environment in which SACCOs runs its operations, there are inefficient and non- functional infrastructure facilities which led to increase in the cost of operation. In another study by Makori, Munene & Muturi (2013) cited the high dependency on short term borrowing was causing the operating to be high.
A study by Makori, Munene & Muturi (2013) on the challenges facing SACCOs in Gusii region in Kenya revealed that the high investment in non-earning investments and inadequate managerial competence contributed to the failure of the Kenyan SACCOs. Structured questionnaires, interviews and focused discussion were used in the study with selected persons to collect data. In another study by Olando, Jagongo & Mbewa (2013) on the contribution of financial stewardship to the growth of SACCOs in Kenya indicated that SACCOs did not adequately cover their costs on investments …show more content…
In his study, he recommended that SACCOs should provide guidelines on loan policy and credit extension to members; need for integration of SACCOs’ information system to employers; and need for Ministry of Co-operative Development and Marketing to liaise with Ministry of Immigration and Registration of Persons to be able to instantly access information on employees who are migrating. The study also reported that growth of SACCOs was related to the control of loan default by the agents. The study did not explain how growth of wealth would be achieved. The study by Gaita (2007), shows that the lending institutions were not growing significantly due to poor loan disbursement practices. It recommended that lending institutions should make products and services more available; train stakeholders and provide favourable regulatory and legal framework for the growth of the institution. Gaita’s (2007) study also showed that failures in SACCOs were related to loan disbursement process. Legal framework and stewardship was related to the growth and sustainability. The study failed to explain how growth of wealth would be
Intensified competition between SACCOs as well as allowing members to easily compare offers provided by different SACCOs has heightened the rate of member switching to other service providers. In its widest sense, innovation is considered to be anything that is new to a business or as comprising new products and processes and significant technological changes of products and processes (Hine & Kapeleris, 2006). They add that innovation has been implemented if it has been introduced on the market or used within a production process. There are five types of innovation, namely, introduction of a new commodity; a new production method; opening up of a new market; change in source of supply; and re-organization …show more content…
From the study, it was also noted that due to the environment in which SACCOs runs its operations, there are inefficient and non- functional infrastructure facilities which led to increase in the cost of operation. In another study by Makori, Munene & Muturi (2013) cited the high dependency on short term borrowing was causing the operating to be high.
A study by Makori, Munene & Muturi (2013) on the challenges facing SACCOs in Gusii region in Kenya revealed that the high investment in non-earning investments and inadequate managerial competence contributed to the failure of the Kenyan SACCOs. Structured questionnaires, interviews and focused discussion were used in the study with selected persons to collect data. In another study by Olando, Jagongo & Mbewa (2013) on the contribution of financial stewardship to the growth of SACCOs in Kenya indicated that SACCOs did not adequately cover their costs on investments …show more content…
In his study, he recommended that SACCOs should provide guidelines on loan policy and credit extension to members; need for integration of SACCOs’ information system to employers; and need for Ministry of Co-operative Development and Marketing to liaise with Ministry of Immigration and Registration of Persons to be able to instantly access information on employees who are migrating. The study also reported that growth of SACCOs was related to the control of loan default by the agents. The study did not explain how growth of wealth would be achieved. The study by Gaita (2007), shows that the lending institutions were not growing significantly due to poor loan disbursement practices. It recommended that lending institutions should make products and services more available; train stakeholders and provide favourable regulatory and legal framework for the growth of the institution. Gaita’s (2007) study also showed that failures in SACCOs were related to loan disbursement process. Legal framework and stewardship was related to the growth and sustainability. The study failed to explain how growth of wealth would be