An Evaluation of organizational factors influencing the extent of digitalization of Deposit-Taking Savings and Credit Co-Operative Societies in Kenya
Date
2025
Authors
Muchika, D. M.
Journal Title
Journal ISSN
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Publisher
Strathmore University
Abstract
Kenya has gained global recognition for its advancements in financial technology, notably exemplified by the transformative impact of Mpesa on the economy since its inception in 2007. However, amidst Kenya's ongoing strides in financial sector innovation, the organizational factors influencing the extent of digitalization among Deposit-Taking Savings and Credit Cooperative Societies remain a compelling area for investigation. This study sought to elucidate the organizational factors influencing the degree of digitalization within Saccos, with a focus on understanding the effect of management support, organizational culture, and employee capability. The study carried out the control effect of firm size on the relationship between organizational factors and the extent of digitalization. The study was premised on the theoretical frameworks of the Diffusion of Innovation theory and Technology Acceptance Model and focused on the 176 licensed and authorized Deposit-Taking Savings and Credit Cooperative Societies in Kenya as of 2023. Data was gathered from secondary sources, such as the regulator’s portal, i.e., SACCO Societies Regulatory Authority websites, as well as primary sources, including sending questionnaires to the institution's management over one month. The collected survey data was analyzed using a mix of descriptive, correlation, and ordinal regression analysis. Correlation analysis showed that organizational culture had a weak positive and significant relation to the digitalization of Saccos. The analysis further revealed a positive and significant association between employee capability and digitalization. On the third variable, the results demonstrated that there was a weak and positive relation between management support and digitalization. The regression results confirmed that organization factors and firm size had a positive and significant effect on the digitalization among the Saccos in Kenya. Regarding the first objective of management support, the study revealed a positive and insignificant effect on digitalization among DT-SACCOs in Kenya. The research further established that the effect of organization culture on the digitalization among deposit-taking DT-SACCOs in Kenya was positive and statistically significant. The analysis of the third variable, employee capability, demonstrated that employee capability had a positive and significant effect on digitalization among DT-SACCOs in Kenya. The analysis of the moderator variable firm size indicated that both the number of branches and the age of the DTSACCOs had no significant effect on digitalization levels. The study then recommends that institutions cultivate a culture that values innovation, adaptability, and openness to technological change. The firms should make sustained investments in employee training, especially in emerging technologies relevant to financial services. The study further recommends that institutions should continue investing in advanced digital infrastructure, including mobile applications, online platforms, and secure transaction systems, that enhance service accessibility and efficiency. Further research could also be conducted on other financial institutions, such as microfinance banks or commercial banks, to offer insights into best practices, challenges, and unique factors influencing digitalization across different financial service providers.
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Full - text thesis
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Citation
Muchika, D. M. (2025). An Evaluation of organizational factors influencing the extent of digitalization of Deposit-Taking Savings and Credit Co-Operative Societies in Kenya [Strathmore University]. http://hdl.handle.net/11071/15798