Browsing by Author "SARAH NJERI KIMITI"

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    INVESTMENT DIVERSIFICATION AND FINANCIAL PERFORMANCE OF MWALIMU NATIONAL TEACHER’S SACCO IN KENYA
    (THE CATHOLIC UNIVERSITY OF EASTERN AFRICA, 2025-09) SARAH NJERI KIMITI
    In Kenya, SACCOs—savings and credit cooperative societies—are essential for increasing financial inclusion, fostering economic resilience, and improving the welfare of their members. Several of them, including Mwalimu National have adopted investment diversification strategies in industries like banking, insurance, and real estate in order to stay viable and competitive. Concerns regarding the irregularities in financial performance have surfaced in spite of these calculated endeavors, indicating that diversification might not be yielding the desired results. This presents significant doubts regarding the strategic efficacy of such investments in attaining long-term financial results. By analyzing the connection between investment diversification and financial performance in the sector, an area that has gotten less empirical attention than commercial financial institutions, this study fills a significant gap in the literature. The study utilized a quantitative approach based on the Agency Theory (Jensen & Meckling, 1976), Resource-Based View (Barney, 1991), Goal-Setting Theory (Locke, 1998), and Theory of Constraints (Goldratt, 1984). Descriptive research design was adopted where investment managers, strategy and audit managers responded. A target of 87 respondents was focused on. Likert scale questions were used to get primary data which was analyzed through descriptive and inferential methods. The results indicated that financial instruments investments have the strongest and most significant positive effect on Mwalimu National’s financial performance, banking sector investments had a statistically significant positive relationship with financial performance, real estate investments have a moderate but statistically significant positive impact on financial performance while stock investments showed positive but not statistically significant relationship with financial performance. Based on this, overall, the study recommends that Mwalimu National should continue prioritizing investments in financial instruments, banking products, and real estate, while carefully evaluating the risk-return trade-offs in stock investments, which currently do not significantly enhance performance. Specifically, Mwalimu should consider expanding its portfolio in financial instruments, especially long-term government bonds and short-term treasury bills, to enhance performance and minimize financial volatility. It can also be recommended that given the strengths of banking sector investments, Mwalimu should continue to strategically utilize banking sector investments as part of its treasury and asset-liability management framework. Given the effect of real estate investments, the study recommends Mwalimu to approach real estate investments with a long-term view and a robust risk management framework. Given the findings on stock investments, the study recommends Mwalimu to re-evaluate its approach to stock investments, possibly reducing exposure or outsourcing management to experienced fund managers with a proven track record. Alternatively, if stock exposure is to be retained, it should be part of a diversified strategy with strong internal controls and monitoring systems in place.