Abstract:
Sacco Societies have continued to use a variety of financial models to assess financial performance.
Despite this, recent studies have pointed at an increase in the number of Sacco Societies experiencing financial
difficulties. These difficulties have stifled the performance of Saccos. Sacco Societies have, however, failed to
recognize factors that influence financial distress and the extent to which they influence their financial
performance. The aim of the study was to determine the relationship between capital sufficiency and
performance of deposit taking Saccos in Kenya. This study was anchored on Keynes Liquidity Preference. It
employed a correlation research design where a census study was conducted on all deposit taking Sacco
Societies registered with the Sacco Societies Regulatory Authority (SASRA). A data extraction sheet was used
to collect panel data for all deposit taking Sacco Societies in Kenya for the period between 2018 and 2022. The
study collect data from Audited Financial Report achieve validity and reliability of the data. Descriptive analysis
and inferential analysis such as regression analysis and model specification tests was used to analyze data with
the help of STATA software version 15.The study utilized mean and standard deviation in descriptive statistics.
It also utilized simple panel regression techniques as inferential statistics for testing the hypothesis of the study.
The results revealed that Capital sufficiency had a statistically negative significant relationship with the
financial performance of Deposit taking SACCOs (β5=-0.393, P=0.000<0.05). The study concluded that capital
sufficiency had significant relationship with financial performance. The study recommended that SACCOs
should consider the level of capital sufficiency as its affect financial performance.
