Brm Chapter 1, 2,And 3

8/6/2019 Brm Chapter 1, 2,And 3

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CHAPTER ONE

INTRODUCTION

1.1BACKGROUND

Baraton SACCO society limited was incorporated on 1985 September 23, under co-operative

society Act No. 12 of 1997 which was amended in 2004.it started its operations the same year

with 53 members, with a compelling economic objectives of mobilizing members savings to

provide financial support to the members. Whereby it started accepting deposits from membersand granted those loans at a reasonable rate of interest in times of need. It has the responsibility

to their members to run daily operations in responsible manner that protect members deposit and

the integrity of the institution. A best practice in its an operational standard includes; adherence

to generally accepted accounting principles, transparency in accounting and operations and

implementation of internal control policies and procedure that protect the institution against

employee and members risk.

The Sacco has bylaws that contains;

Names, Address and Objectives of the society

Name, Address and occupation of members

Share capital and its dimension

Characteristics of Baraton Sacco society ltd

Membership of Baraton Sacco society ltd is open to all Baraton employees who have a

common interest. The Saccos are required by SASRA to have minimum often members

at it has not specified the maximum number.

Members join the Sacco voluntarily i.e.by choice whereby a member can join the society

and withdraw its membership at wish.


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The Sacco is regulated by the Sacco society regulated authority (SASRA) which is give

mandate by the ministry of co-operative and development.

The Saccos capital is contributed by all members through their savings and the interest

on loans.

The Sacco is managed by board of directors which are the elected representative of the

members interest.

It provide products and services to members and non- members through front office

services activities (FOSA)

Dividends are distributed according to shares held by each member.

Baraton Sacco divisions

The Sacco has two divisions i.e.

Back office services activities (BOSA)

Front office services activities( FOSA)

The back office services activities section is for Baraton Sacco members, these are the

shareholders of the Sacco. They earn dividend from their shares and interest on the deposit.

They get loans three times their deposits which payments are made through a check off

system in the University, same as their monthly contribution.

The front office services activities section was started by the Baraton Sacco on April, 2009,

and it is the banking section of the Sacco where members, student, staffs, entrepreneurs,

casual workers and the general Baraton community make their savings and other banking

services such as

M-pesa


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Salary processing etc

Baraton SACCO Objective to its members

To provide a safe and convenient place to save their money whatever amount they

can afford.

To provide loans to its members

To provide financial counseling

To provide member education

Baraton SACCO philosophy and principles

Equality: The idea that everyone has the same right or equal

Equity: The idea that refers to fairness, justice and honesty, proportional distribution

of something equally.

Mutual self help: The idea that people are the masters of their own destiny through

working together as a group.

Principles:

Voluntary

Democratic member control

Member economic participation

Autonomy and independence

On going education, training and information

Concern for community

Building financial stability


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Corporation with other co-operatives

Mission

The mission of the Baraton SACCO society limited is to be a model SACCO that efficiently

mobilizes resource endowment through savings, credit and investment for holistic and

empowerment of one and all our membership family.(prospectus).

Vision

The vision of the Baraton SACCO society limited is to be a world class SACCO, excelling in

stewardship of members resources.

Core values

The core values of the Baraton SACCO society limited are; they espouse, cultivate nurture

and uphold integrity, temperance, equity, honesty, respect, prudence, fairness, and efficiency

and accountability practices for the common good of all in all.

Motto

The motto of the Baraton SACCO society limited is together we grow

1.2 STATEMENT OF THE PROBLEM

Baraton SACCO society limited has a total of two hundred and ten actual members (2011).It has

a great number of both fosa and bosa services offered for actual, potential member and the

general public. This study seeks to find out the effects of publics perception and determine the

relationship between perception and Sacco services. It also intended to evaluate other factors that

influence the public (customers) on their choice to service and products apart from the general

perception on the SACCO.

1.3 OBJECTIVES OF THE STUDY


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The general objective of the study is to asses the publics perception of Baraton SACCO by

public.

The specific objectives

i. To determine the relationship between publics perception and SACCO services

ii. To establish the effect of perception of public on services offered at the Baraton SACCO.

iii. To evaluate other factors that influences the perception of public on Baraton SACCOs

services

1.4 RESEARCH QUESTIONS

i. What is the relationship between perception and Baraton SACCOs services

ii. How does perception affect the Baraton SACCOs services?

iii. How does perception contribute to the growth Baraton SACCO services?

iv. What other factors other than publics perception that influence Baraton SACCO

services?

1.5 SIGNIFICANCE OF THE STUDY

The results of this study may be useful to:

It will enable researchers to have a closer look on how public perception influences Baraton

SACCO services and SACCOs in general.

It is hoped that this proposed study will make some contribution to the existing knowledge in the

wide, broadening and ever dynamic field of SACCOs. Although several studies have been

conducted on factors that influence SACCO services, little attention has been paid to publicperception on services.

It is also expected to add knowledge to the wide field of Saccos management. As such, manager

will beable to know what basis they would give advice in services for public.


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It will be useful to micro- financial advisors considering how the publics perception can

influence services decisions.

1.6 SCOPE AND LIMITATION

The study will be delimited in the following manner:

a) Public -customers who are the actual or potential members and the general public that get

services provided by the SACCO

b) Baraton SACCO Society limited as a service provider.

c) The Geographical area of study: within UEAB, Chemundu and Baraton center

We were limited by time in that we had other course to do that required much of our time. The

study is conducted within UEAB, Chemundu and Baraton center; there were also some minor

setbacks during carrying out this study and collecting the required data. It was discovered that

some respondent were not a available through a lot of effort was made to ensure that they were

reached.

1.7 DEFINITION OF TERMSa) SACCO

CHAPTER TW0

LITERATURE REVIEW

2.1 WHAT ARE SACCOs

SACCOs, acronym for Savings and Credit Cooperatives, are Associations of people who have

come together with common goal/ s geared at improving their livelihood economically. They are


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an important part of the financial sector in Kenya, providing savings, credit and insurance

services to a large portion of the population.

It is the government of Kenyas commitment to establish SACCO legislation, implement

international financial performance standards and begin supervision of SACCOs in Kenya that

provides the incentive for improvement of SACCO management and performance.

Co-operatives have played an important role in the development of the economies of Kenya have

led to the uplifting of the standards of living of the people.

2.2 SACCO SOCIETIES REGULATORY AUTHORITY (SASRA)

It was established under the Act is mandated to implement the new law to foster growth, safety

and financial soundness of the Sacco subsector thus positioning it to play a more significant role

in economic development by enhancing financial access to the many Kenyans who have no

access to financial services.

The Regulations provide a generous translational period of four years within which a licensed

Sacco will fully comply with the prudential standards on capital, investments, non productive

assets and external borrowing. Sacco leaders are therefore advised to guide their Sacco

appropriately because failure to apply by June 2011 implies that the Sacco does not intend to

continue operating FOSA

Licensing marking the beginning of supervision through off site and on site surveillance to

ensure that SACCOs adhere to the operational regulations and prudential standards as stipulated

in the law. This will enhance accountability and transparency, the hallmark of good governance

which is a prerequisite for deposit taking financial institutions. The challenge to you is to

translate this regulated status to drive growth through appropriate business strategies.

Regionally, Kenyas financial sector is ranked highly and so is the Sacco subsector. SASRAaims are to strictly enforce the Act and Regulations to entrench good governance practices,

operational and financial management systems that promote sound financial and business

practices in the Sacco subsector. This will promote member confidence opening growth

opportunities for Saccos that provide demand driven financial products and services. Towards

this end, the Authority will pursue strategic partnerships with financial regulators in Kenya and


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beyond, as well as development partners to learn and benchmark with the best international

standards and practices.

All licensed Sacco societies are required to join the Deposit Guarantee Fund (DGF) once

established. The SASRA has commenced the process of setting up DGF and will soon coordinate

the licensed Sacco Societies to nominate four persons to be appointed by the Minister to the

Board of Trustees. The purpose of this Fund is to compensate the depositors in the event that a

Sacco fails.

The law requires that all Sacco Societies that operated Front Office Service Activity (FOSA) at

the date the Minister published the Regulations make application for license by June 17th 2011.

It is emerging that once a Sacco has been granted the letter of intent, the applicants move fast

because they have been conducting deposit taking business hence the necessary physical

infrastructure and information management systems are in place and only requires upgrades to

comply with the regulatory standards. This has not only shortened the turnaround time but also

lowered the regulatory costs for most of the Sacco societies.(speech 4/3/2011 inaugural license

ceremony by Mr. Carilus Ademba HSC,chief executive officer, SASRA)

2.3 THE CONCEPT OF CORPORATE GOVERNANCE

Corporate Governance is defined as the system by which a corporation is directed, controlled andheld to account for the manner in which power is exercised in the stewardship of its assets and

resources to increase and sustain shareholder value and satisfy the needs and interests of all

stakeholders.

Governance Problems at Co-operative Level

i) At Board Level

The Board oversight and management operational responsibilities are inadequately defined in theby-laws of Co-operative Societies. The major concerns include:

Key decisions on urgent matters such as change in interest rates, introduction of new

products and services have to await approval by the Annual General Meeting.


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Elected Board members are frequently non-professional volunteers yet they assume

highly technical responsibilities such as loan analysis and disbursement, budgeting and

financial expenditure control.

Lack of clear guidelines on where, for example the Credit Committees authority ends and

where the Executive Committee begins, and where the staff members authority begins

hence delayed decision making.

Over-reliance on guidelines or circulars from the Commissioners Office that are obsolete

or may not apply across the board for all types of Co-operatives.

Board members succumbing to political pressure from external forces to implement

activities that counter the management ethics and standards.

Corruption, gross mismanagement and misappropriation of funds by some elected official

who abuse the trust of the members and deny them the hard earned funds.

Unrealistic office tenure that ends up being costly in mainstreaming governance

interventions in respect of training and instilling professionalism.

Failure to convene general meetings and hold elections when due in some Co-operative

Societies and the refusal of some officials to vacate office after being duly voted out by

the members in their general meetings.

Financial considerations on the fact that some members are outspoken has at times led to

the incompetent members being elected into leadership positions and at the detriment of

leaders who are visionary, hardworking, honest and competent.

Leadership wrangles and endless litigations due to conflicts that end up leading to

wastage of resources and loss of focus in terms of the sound development of the Co-

operative.

Illegal expulsion of members perceived to be trouble makers.

Illegal and unauthorized investments.


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Reluctance to acknowledge need for change and competencies are unsuited to strategic

challenges and leadership roles.

Board members and Supervisory Committee may collude to protect one anothers

interests, e.g. insider loans and high managers salaries.

ii) At Staff Level

Job insecurity due to changes in the Board members and weak terms and conditions of

service lead to poor performance.

Unprofessional process of recruitment that encourages, favourism, tribalism, andnepotism sometimes attracts incompetent personnel. There have also been instances of

illegal dismissal of employed staff.

Absence of appropriate personnel and administration policies and Accounting Procedures

Manual, job descriptions and specifications and performance appraisal tools compound

the problems of governance.

Lack of adequate controls leading to a fertile ground for fraud in some of the

Co-operative Societies.

Lobbying and canvassing for the election of certain Board members who may be

relatives, friends or appear to favour their working arrangements at the detriment of the

functioning of the Co-operative Society.

Lack of direct control of the Organization by the members has led to a situation where

some managers do business diversification that does not benefit the owners but meant for

their own interests.

iii) At Member Level


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Inadequacy of resources, lack of Education and Training force members to exert pressure

on the Board members to implement issues in a manner that abuses the spirit of good

governance.i

Salaries for the staff are not competitive as those paid to other financial institutions

because members reject offering salaries that appear higher than what they earn from

their employers, trade or businesses. Therefore attracting and retaining better qualified

managers and staff is difficult.

Where a Co-operative is very large, members may fail to look closely at the prudential

actions of their Board members. In some cases, where a Co-operative is under the

delegates system as opposed to general membership, the delegates end up expressing

their own views as opposed to those of their members.

The one member one vote principle at times undermines the genuine concerns of the

minority. The academic and patronage criteria are at times overlooked for other minor

considerations.

Physical confrontations of members in some Co-operatives.

Split of viable Co-operatives into small uneconomical units.

Aims and pillars of Good Corporate Governance

Good corporate governance aims at achieving:

Increased profitability and efficiency of business enterprises.

Enhanced ability to create wealth for shareholders.

Increased employment opportunities with better terms of workers.

Enhanced separation of ownership from control.

Viability in corporations for investment in a competitive global market.


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Enhanced legitimacy, responsibility and responsiveness of the business enterprise.

Transparency, accountability and probity of business enterprises.

2.4 CORE PRINCIPLES IN THE EAST AFRICAN CODE OF BEST PRACTICE

The following are the seven principles of Co-operation applied in mainstreaming governance in

the Co-operative Societies:

Voluntary and open Membership

Democratic Member Control

Economic participation by Members

Autonomy and independence

Education, training and information

Co-operation among Co-operatives

Concern for community in general

2.5 IMPORTANCE OF GOOD CORPORATE GOVERNANCE PRACTICES

They facilitate achievement of the following in the Co-operative Societies

Strategic thinking and strategy setting

Balance of power and control

Efficiency and effectiveness


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Transparency and probity

Productivity and responsiveness

Responsibility and receptiveness

Creativity and innovativeness

2.6 HISTORY OF THE SACCO MOVEMENT

IN THE WORLD

In 1849 in Germany Herman Schulze and William Raiffersen started the first savings and creditcooperatives to assist people overcome economic problems during the time of famine that was

there that time.

In 1850 in England workers in a mill factory started savings and making loans to help each other.

In 1901 SACCOs spread to the North America first to Canada by Alphonse Desjardine and then

to the U.S.A by E. Filen a Boston Merchant for his employees.

In 1970 the world council of credit union (WCCU) was formed with their headquarters in

Madson Wisconsin, USA to provides an international forum for discussion and association

provides assistance to new and developed movement, offers insurance and training of a large

scale.

IN AFRICA

In 1965 the Africa confederation of cooperation society savings and credit association was

formed in Nairobi Kenya as pan Africa body. It was formed to promote the SACCOs principles,

provides a forum for discussion, offer insurance to SACCO members on life savings and loan

protection and educate affiliate members on a wide variety of credit union issues.

SACCOs IN KENYA

The Cooperative movement in Kenya dates back to 1931 when the first ordinance to regularize

the operations of the cooperatives in the country was enacted. The following decade witnessed


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increased intervention in the sector with the eventual enactment of the Co-operative Ordinance

Act of 1945, the predecessor of the current Co-operative Societies Act, Cap. 490 of the laws of

Kenya - as amended in 1997.

Savings and credit cooperative societies (SACCOs) are registered and regulated under the Co-

operative Societies Act. For registration the Act requires a primary society to consist of at least

10 persons and have the following objectives:

i) Promote the welfare and economic interests of its members.

ii) Incorporate in its bylaws of the following cooperative principles:

Voluntary and open membership;

Democratic control of membership;

Economic participation by members

Autonomy and independence;

Education, training and information;

Cooperation among cooperatives and

Concern for the community in general;

SACCOs are accorded the same treatment as producer or marketing cooperatives, and to qualify

for registration they are not required to raise any capital. Also, a SACCO needs no license to

commence trading, whether offering back-office or front office services (banking services). Once

registered, the SACCO has to operate according to the following aspects of prudential

management of societies as provided for in the Act:

No member other than a cooperative society shall hold more than one fifth

(20%) of the issued and paid up capital for any cooperative society.

Books of accounts must be kept and audited every year by an external auditor

appointed at the annual general meeting.


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The registrar can carry out an inquiry or inspection of a cooperative society at the

expense of the society.

The Ministry of Cooperative Development has developed guidelines that contain detailed

operational requirements for the SACCOs to follow. The societies also prepare and submit

monthly reports to the Ministry. In addition, in conjunction with the Rural Banking Project , an

inspection team has been put in place, which monitors whether the societies are operating under

sound banking principles.

Section 43 of the Act prohibits a Cooperative Society from giving loans to non members,

unless the by-laws of the society provide for giving such a loan. Therefore the law gives

SACCOs the leverage to develop a policy framework for lending to non-members. In rural areas

a cooperative society may receive deposits and loans from persons who are not members on such

conditions as its by-laws or rules under the Act may prescribe.

2.7 FORMATION OF SACCOs

The vast number SACCOs in Kenya have been formed over the years.

The SACCOs target a specific segment of population with similar orientation or with similar

preoccupation. They are mainly low-income earners and the Society has objectives of uplifting

their financial status. There are some SACCOs that target community members in general

because of the virtue that they belong to that particular community whereas there are others who

are more specific, their members have to come from a certain clique.

The main requirement across all SACCOs is that their members have to have some source of

income before qualifying to join the SACCOs. The SACCOs mobilize funds from them and

give them access to financial services like loans, savings facility, front office services which is

other wise in accessible to them through the main banks that are there either because they are

unaffordable or physically inaccessible.

2.8 TYPES OF SACCOs


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Three types of cooperatives are recognized in the Act;

Primary Cooperatives,

Cooperative Unions

Apex Cooperatives. SACCOs fall in the category of Primary Cooperatives.

2.9 SACCO CURRENT STATUS

Cooperatives can provide financial services to their members through existing product or

marketing societies, SACCOs and the Co-op Bank. Members also have the opportunity of saving

with their marketing societies through banking sections of the district cooperative unions, which

maintain savings account for their members.

The 1997 amendments to the Co-operative Act, Cap 490, enabled SACCOs to make investments

without approval from the Ministry of Co-operatives. This has greatly removed bureaucracy

from the day-to-day operations of the societies but has increased the risk of making unsound

investments. Already some SACCOs have suffered in the recent bank crisis.

The Ministry of Co-operatives is ill equipped to develop guidelines for SACCOs or to carry out

effective supervision. Countries where SACCOs are allowed to take deposits and offer banking

services place them by law under the auspices of the Central Bank and the Ministry of Finance.

For example, credit unions in Burkina Faso are licensed and regulated by the Central Bank.

2.10 SACCO NUMBERS AND SPREAD

In a survey carried out by KIPPRA, it emerged that, as at 31 December 1997, there were 3,169

SACCOs, with a membership numbering 4.85 million. Table 1 shows the distribution of

SACCOs by province. The data provided in this table is however misleading because the urban

SACCOs also serve many employees of public institutions and government ministries whose

SACCO headquarters may be in Nairobi but where many of its members are working in other

urban and rural bases throughout the country. This would explain the difference in numbers in

Table 2.1.provincial distribution of SACCOs


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As at 31 December 1997, savings through SACCOs stood at Ksh 29 billion and the outstanding

loans amounted to Ksh 22 billion. The loans to deposits ratio were 74%, which demonstrates the

effectiveness of the SACCOs as a financial intermediary.

In another baseline and socio-economic survey carried out on behalf of COFEP between 21st July

2003 14th August 2003, came up with the following number of SACCOs.

SACCOs spread

Financial institution

Rural SACCOs 136

Urban SACCOs 3074

Totals 3210

As at 31st December 2004, there were 4,000 active SACCO Societies with a membership of

about 3.0 million. The share capital and deposits stood at Ksh 94 billion while the loans

outstanding were Ksh. 64 billion. Reserves amounted to Ksh 3.0 billion. In view of the varied

activities in the country, we now have salary based, rural and traders SACCOs. There is also Jua

Kali, transport and community based SACCOs.

2.11 SACCO OPERATIONS

Product and Services Offered

Through mobilization of funds the SACCOs in Kenya offer the following services to its

Type of

SACCOs

Coast Rift

valley

Nyanza Nairobi Eastern North

eastern

Central Western Totals

Rural 4 58 8 - 11 - 13 - 94

Urban 316 28 109 1249 92 8 266 72 2140

Totals 320 86 117 1249 103 8 279 72 2234


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Members:

Loans

Deposit & Savings facility

Front office services

Cheque Clearing Services

The most common product offered throughout the SACCO fraternity is the Credit and Loan

services. Many of the Institutions have no Institutional capacity or capital base to offer other

services. There are few that are able to offer other products and services other than the loan

product.. There are many SACCOs like Baraton SACOO society limited who offer services to

the public. They (Baraton SACCO) have organized procedures and documentation that enables

them to do this. The main categories of loans and accounts offered are as follows:

Salary processing

Account i.e. Savings, children, holiday, group, business, education, fixed deposit etc.

Emergency loans

sales of bankers cheques

salary advances

Special loans

loan clearance

M-pesa

short term loans

welfare loan


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Depending on what kind of loan a member is applying for, it varies in size and period of

payment. The loan interest varies from 10% to 18% p.a. across the SACCOs with payment

periods ranging from 5 months to 36 months. Once a member applies for a loan approval is

ideally supposed to take between 14 to 30 days but this is not always the case because of cash

liquidity problems that makes them take longer. The loans are screened and approved by a credit

committee or an outside body e.g. Baraton SACCO society limited members committee screen

and approve the loan.

2.12 SACCO Membership

There are different entry requirements for SACCOs. They consist of acquisition of minimum

number of shares that varies from SACCO to SACCO. They are between Ksh 100 to Ksh 6,000.

The membership is characterized by monthly contribution which is either through check off

system for the employment based institution; percentage deduction from sales of goods eg at

Baraton SACCO, 10% of the sales of members carvings are deducted and remitted to the

SACCO. Members simply remitting to the SACCO the agreed monthly contribution where there

are no mechanisms for direct deductions also raise shares.

Membership in SACCOs varies depending on outreach of the SACCOs. They range between

about 158 to 37,000 members. There is however a big variance between potential members and

the actual members. This shows poor outreach in the SACCOs to its target membership.

2.13 Capital Bases

Capital in the SACCOs is raised through members contributions. There is a minimum share

capital raised and maintained before loans can be disbursed to members. Share capital raised

from the members ranges from Ksh 66,000 to Ksh 160 million.

2.14 Other Activities

SACCOs get involved in marketing of the products they sell for wider outreach. They sell their

policies in barazas, social gatherings (funerals), promotion meetings, the church structure,

women groups, local leaders and society meetings. Baraton SACCO is thinking of mobilizing


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local Matatus at Baraton center to start Matatu groups / association. SACCOs share capital base

is not dependent on the number of members it has.

2.15 PROBLEMS EXPERIENCED BY SACCOs IN KENYA

SACCOs experience a wide range of problems partly owing to the fact that they target low

income earners and have to establish a balance between serving them adequately and also

meeting their operation costs. Some of the major problems experienced by SACCOs are as

follows in order of most recurrent problem.

No comprehensive Loan policy and procedures

Most SACCOs either have no loan policy and procedures or what exists is not very clear and

comprehensive. There are cases where loan-aging analysis is hardly practiced, there are no

provision for loan write offs and losses. No guidelines exist as to what to do in cases where a

member defaults in loan repayment.

No Institutional capacity to introduce other Products & Services

Most SACCOs lack capacity to expand their product range because of lack of capital & also lack

of necessary management systems. They lack in capacity for market research and product

development to introduce other services.

Lack of Sufficient Funds for provision of services

Some SACCOs suffer from lack of sufficient funds to provide services especially loans to its

members. Whereas waiting period for loans in some institutions could be 14 30 days, members

have to wait for between 6 12 months to have access to the loans. Even seemingly organized

SACCOs with comprehensive loan policies suffer from lack of enough capital for service

provision.

No Internal Control Systems put in place


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For some SACCOs, there are no savings & internal control procedures have been put in place.

They lack from internal audit committee, no written audit policy and procedures. Reconciliation

of cashbook balances and actual cash in the safe is sometimes not done frequently. There is poor

documentation of loans and other financial record.

Client Base not growing

The membership of the SACCOs is either stagnant or declining. The client base is not growing

fast enough despite numerous campaigns by some SACCOs

Lack of Vision / Strategy follow up

Some SACCOs lack a clear cut direction of where they are going, what they want to achieve or

progress they are making towards their targets. There are cases where disbursement targets have

fallen behind growth targets. Systematic process towards product development or improvement

is also lacking.

Loan defaults from members

Several cases of where members default from loan payments.

Non Aggressive Staff / Lack of Staff

Some SACCOs suffer from lacking aggressive guidance from the management committee and its

staff. In one particular SACCO there was no succession plan. One sole owner who kept all

documentation and issues relating to the SACCO ran the Society. After his death the SACCO

went down, as there were no records to ensure its continuity.

References:(in complete work)

Ganser, T. (1996). What do mentors say about mentoring?Journal of Staff Development, 17(3),

36-39


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Galbraith, M. W., & Cohen, N. H. (Eds.). (1995). Mentoring: New strategies and challenges.

SanFrancisco, CA: Jossey-Bass.

Siror, J. (2011, April 25).Time running out for Saccos offering FOSA.Retrieved April25, 2011,

from standard online: http://eastandard.net

Wahome,M.(2011,March 5).Saccos may fail to get new license: Retrieved April 25, 2011,from

Daily nation online: http//www.nation.co.ke

KIPPRA,survey result.(2006).legal and other constraints on Access to financial services in

kenya:Retrieved April 14 2011,from http://www.kippra.org

Ademba,C.(2011,March 4).inaugural license ceremony. Retrieved April

20,2011,from:http//www.kusco.com

CHAPTER THREE
http://www.kippra.org/http://www.kippra.org/


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RESEARCH METHODOLOGY

3.1 INTRODUCTION:

This chapter describes the research methodology used in the study. It covers:

Area of study

The respondents

Variables of study

Research design

Study population

Data collection instrument

Sample technique

Statistical treatment of data

3.2AREA OF STUDY

The study was delimited only to Baraton SACCO society limited, services and concentrated on

the publics perception to services provided by the Baraton SACCO society limited.

3.3 THE RESPONDENTS

The respondent included Baraton SACCO customers/clients who are both actual and potential

members and the general public (Student, casual workers, entrepreneurs, staff/faculty and other

that do not fall among the listed profile)

3.4 VARIABLES OF STUDY

The research variables are; gender, age, citizenship, occupation, educational, current ,residence,

rating of some of the aspect about SACCO, services and rating of the staff .


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3.5 RESEARCH DESIGN

The target sample will be randomly stratified so as to take into account the opinions and views of

the intended participants in investment activities.

The researchers used different ways and methods in the accumulation of the information about

the study.

3.5.1 Primary data:

Primary data can be defined as data observed or collected directly from-first hand experience.

The primary data was delivered from the distribution of questionnaire to the student, staff,

casual worker and entrepreneurs.

The survey questionnaire which was distributed to the respondents aimed to specifically answer

significant questions they were to specify their gender, age, occupation, residence and

citizenship.

3.5.2 Secondary data:

Secondary data can be defined as the data that has been published and collected in the past from

other parties.

The secondary data that were relevant to this study were derived from related studies and records

from the SACCO where the researchers got the information pertaining to the number of customer

from there the researchers made estimation of sample size.

3.6 STUDY POPULATION

It should be hinted that the population used in the computing for the sample size is the total

actual and potential members of the Baraton SACCO. The total population considered in this

study is one hundred. This is the population of all active members of the SACCO year 2011.

3.7 DATA COLLECTION INSTRUMENTS


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A set of questionnaire will be used. The questionnaires will consist of structured and

unstructured questions. The questionnaire will be presented to the respondents and the results

analyzed to draw conclusions.

3.8 SAMPLE TECHNIQUES

The target sample will be randomly stratified so as to take into account the opinions and views of

the intended participants in study activities.

The sample will be randomly stratified since the population targeted will be heterogeneous

implying that it involves different categories of individuals consisting of staffs/faculty, casual

workers, student and entrepreneurs.

The total population considered in this study is one hundred. This is the population of all active

members of the SACCO year 2011.

The formula used to arrive at the sampling size was formulated by Slovin(1960) it is as follows;

n=N / (1+Ne2)

Where n=sample size

N=population size

e=margin error (0.05 or 5%)

Sample computation is presented below

n=100/ (1+100*0.052)

=80

3.9 STATISTICAL TREATMENT OF DATA

Both manual and electronic method of tabulations of the gathered data were used, in projection

of historical data the researchers used the description statistics with the help of software SPSS.

The research data is amenable to treatment by the available techniques for descriptive analysis.

There will be the use of table in the analysis of data obtained from the respondents who filled the


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questionnaires. The data analysis will be put in for of tables, chart, graphs and percentages will

be indicated.

Documents

Brm Chapter 1, 2,And 3