Factors Influencing Choice Of Loan Packages By Sacco Members In Kakamega Central Sub-County, Kenya

ABSTRACT

Globally Co-operative Societies are important vehicles for economic growth and

development and they enhance welfare of their members. Most members have

challenges in accessing certain loans despite the fact that they have accumulated large

deposits in the SACCOs. Moreover there is dearth of information concerning the

factors influencing the choice of loan packages by SACCO members. The purpose of

this study was to analyze the factors influencing the choice of loan packages by

SACCO members in Kakamega Central SubCounty,Kenya.The specific objectives of

the study were to: establish the influence of interest rates on the choice of loan

packages by SACCO members; examine the extent to which repayment period

influence the choice of loan packages;analyse the extent to which loan regulations

influence the choice of loan packages and assess the effect of member factors on the

relationship between Sacco factors and loan packages in SACCOs. The study was

based on Agency, Financial and Stewardship theories. Descriptive research design

was adopted for the study. The primary data used for analysis is based principally, on

a stratified random sample of 374 respondents out of a population of 9758 SACCO

members in Kakamega Central SubCounty.The data for the study was collected using

questionnaires interviews and document analysis .Expert judgment was employed to

determine the validity while cronchbach Alpha coefficient was used to determine

reliability of research instruments. Validity was ensured by getting both descriptive

and Inferential statistics were used to analyse data.The study results revealed that

interest rates influence the choice of loan packages.(R2 =0.305,P