Social Capital And Savings Mobilization In Cooperative Societies, Nyamira County, Kenya

Abstract

The general purpose of the study was to examine the influence of social capital on savings mobilization in co-operative societies in Nyamira County. The specific goals were to examine how trust influences savings mobilization in Nyamira County; establish the effect of networks of association in savings mobilization; examine how norms affect savings mobilization; and establish whether savings mobilization is affected by credit handling as an intervening variable in Nyamira County. A census covering all co-operators with savings accounts in savings and credit co-operative societies in Nyamira County was taken. Descriptive research methods were used to detail the analysis of the predictions as they influenced savings mobilization in co-operative societies. Members with savings accounts formed the population and a stratified sample of 220 members was drawn. Data collection was done using questionnaires and analyzed using STATA 13 computer programme. Regression analysis was done to establish the effect of trust, standards and linkages of cooperative societies and savings mobilization in Nyamira County. The model had three and 182 degrees of difference. The general hypothesis of the research was to examine the effect of the elements of the social capital theory on savings mobilization and co-operative societies in Nyamira County. The model summary showed that the association between savings mobilization and trust, norms and networks of association had no multi-collinearity among the regressors in the model. The Cronbach’s Alpha coefficient showed an inter-item covariance of 0.18 and the scale reliability coefficient of 0.80 confirming the independence of each regressor. The coefficient of probability of trust was 16%, norms 1.4%, and networks of association 0%. The inter-correlations among the items of analysis were positive. The findings concluded that the elements of social capital theory significantly influenced savings mobilization and co-operative societies in Nyamira County. Trust significantly affected savings mobilization in co-operatives societies while norms strengthened co-operative societies and significantly affected the level of savings mobilization in Nyamira County. Networks of association had a significant effect on savings mobilization through co-operative societies in Nyamira County. Co-operative societies needed to examine their members’ relations and adhere to set standards with governance structures based on good norms and well-articulated policies. Employees needed training in credit handling, public relations and the co-operative philosophy. Members should be treated equally. Government needed to embrace the co-operative business model to solve the community’s pertinent issues. The study showed that savings and credit co-operative societies were all-inclusive in resource mobilization which made them financially stable and able to satiate members’ credit needs without discrimination. To capture and expound on the impact of co-operative societies in the development of entrepreneurship in Kenya, further research should be undertaken to establish the motivating factors that influenced member contentment with savings and credit services in co-operative societies in Kenya, and examine the influence of reciprocity on social capital and co-operative savings services that supported entrepreneurship in Nyamira County. It will be interesting to examine the economic influence of the level of education and cooperative production in Kenya.