Title:
EFFECTS OF FINANCIAL PRODUCT INNOVATIONS ON THE FINANCIAL PERFORMANCE OF SAVINGS AND CREDIT CO-OPERATIVE SOCIETIES

Authors:
Kalume, Timothy Kahindi; Makau, Joshua Nzoka, Kenya

Abstract:

Financial institutions world over continue to make huge investments in innovations and training of manpower to handle new technologies. The fast-changing competitive environment, globalization, economic changes, regulation, privatization and the likes demand that these institutions be run efficiently and effectively by continuously engaging in innovations and SACCOs are no exception. This necessitates that the relationship between the growing product innovations in SACCOs and SACCO financial performance be studied The main objective of the study was to establish the effect of financial product innovations on financial performance of SACCO with the specific objectives of the paper being to; find out the impact of mobile banking on financial performance of commercial banks, to examine the effect of agent banking on financial performance of SACCOs, to find out the effect of internet banking on financial performance of SACCOs, to determine the effects of agency banking innovation on financial performance of SACCOs and to investigate the effects of banc assurance on financial performance of SACCOs.  Guided by Rogers’s Innovation Diffusion Theory, Transaction Cost Innovation Theory and Schumpeter Theory of Innovation as the theoretical frameworks, the study employed a historical research design that was used to synthesize evidence from the past to establish facts. Secondary data was collected, analysed, edited and summarized.  The paper found out that money banking, internet banking, agency banking and banc assurance contributed to the increase in SACCOs revenue and other financial indicators. The study recommends that for SACCOs to remain competitive in financial intermediation then they should continuously innovate.