INVESTMENT DECISIONS AND FINANCIAL PERFORMANCE OF MATATU

SACCOs WITH OFFICES IN NAIROBI CITY COUNTY, KENYA.

JORAM KASYOKI MUTUA

D53/OL/CTY/25185/2018

A RESEARCH PROPOSAL SUBMITTED TO THE SCHOOL OF BUSINESS IN

PARTIAL FULFILMENT FOR THE AWARD OF DEGREE IN MASTER OF
BUSINESS ADMINISTRATION (FINANCE OPTION) OF KENYATTA UNIVERSITY

APRIL 2022

i
 DECLARATION

I hereby declare that this research proposal is my original work and to the best of my knowledge,
has not been submitted for a degree or award to any other university or other institutions of
learning for examination purposes.

Signature... .. Date..8/4/2022..............................

Joram Mutua

REG NO. D53/OL/CTY/25185/2018

SUPERVISORS

This research proposal has been submitted for examination with my approval as university
supervisor.

Signature.................................................... Date....................................

Dr. Geoffrey Mbuva

Lecturer

Department of Accounting and Finance

ii
Kenyatta University

DEDICATION

This proposal is dedicated to my dear wife Everlyne Nyamasyo and my children; Patience,
Promise and Prince. Also, my parents Joseph and Elizabeth Mutua. Their precious motivation
and backing was tangential in the proposal accomplishment. Thank you so much.

iii
 ACKNOWLEDGEMENT

I greatly acknowledge and appreciate specifically the guidance of my supervisor, Dr Geoffrey

Mbuva, who continuously and tirelessly guided me in developing, advancing and putting

academic intellect in my proposal. I am convinced beyond any reasonable doubt that without his

assistance, the proposal would not have been completed in such a timely manner. The Kenyatta

University library management, God bless you for your instrumental facilitation towards this

worth course. I also owe a lot of regards to my colleagues who gave me encouragement and

positive criticism as I progressed with writing this proposal. God bless you all. To my dear wife

Everlyne, am grateful for your moral and spiritual support you gave me and showed concern and

understanding during odd hours I sat to develop this paper. You gave me right hand assistance by

convincing me that this academic assignment is realizable.

iv
 TABLE OF CONTENTS

DECLARATION............................................................................................................................i
DEDICATION................................................................................................................................i
ACKNOWLEDGEMENT.............................................................................................................i
TABLE OF CONTENTS...............................................................................................................i
LIST OF TABLES..........................................................................................................................i
LIST OF FIGURES........................................................................................................................i
ABBREVIATIONS AND ACRONYMS......................................................................................i
OPERATIONAL DEFINITION OF TERMS.............................................................................i
ABSTRACT....................................................................................................................................i
CHAPTER ONE............................................................................................................................1
BACKGROUND OF THE STUDY.............................................................................................1
1.1 Introduction..........................................................................................................................1
1.1.1Financial Performance..................................................................................................1

1.1.2 Investment Decisions....................................................................................................1

1.1.3 Matatu SACCOs with Offices in Nairobi CBD..........................................................1

1. 2 Statement of the Problem...................................................................................................1

1.3 General Objective................................................................................................................1
1.3.1 Specific Objectives........................................................................................................1

1.4 Research Hypothesis............................................................................................................1

1.5 Significance of the Study.....................................................................................................1
1.6 Scope of the Study................................................................................................................1
1.7 Limitations of the Study......................................................................................................1
1.8 Organization of the Study...................................................................................................1
CHAPTER TWO...........................................................................................................................1
LITERATURE REVEW...............................................................................................................1
2.1 Introduction..........................................................................................................................1
2.2.1 The Q Theory of Investment........................................................................................1

2.2.2 Free Cash Flow Theory................................................................................................1

2.2.3 Stakeholder Theory......................................................................................................1

2.3 Empirical Review.................................................................................................................1

2.3.1 Replacement and Financial Performance..................................................................1

2.3.2 Modernization and Financial Performance...............................................................1

2.3.3 Diversification and Financial Performance................................................................1

v
 2.3.4 Regulation Requirements and Financial Performance.............................................1

2.4 Summary of Literature and Research Gaps.....................................................................1

2.5 Conceptual Framework.......................................................................................................1
CHAPTER THREE.......................................................................................................................1
RESEARCH METHODOLOGY.................................................................................................1
3.1 Introduction..........................................................................................................................1
3.2 Research Design...................................................................................................................1
3.3 Target Population................................................................................................................1
3.4 Sample Size and Sampling Procedure...............................................................................1
3.4.1 Sample Size....................................................................................................................1

3.4.2 Sampling Procedure.....................................................................................................1

3.5 Data Collection Instruments...............................................................................................1

3.6 Pre-testing of Research Tools.............................................................................................1
3.6.1 Validity Test..................................................................................................................1

3.6.2 Reliability Test..............................................................................................................1

3.7 Data Collection Procedures................................................................................................1

3.8 Data Analysis and Presentation..........................................................................................1
3.9 Diagnostic Tests...................................................................................................................1
3.9.1 Multicollinearity test....................................................................................................1

3.9.2 Normality test................................................................................................................1

3.9.3 Homoscedasticity test...................................................................................................1

3.10 Empirical Model................................................................................................................1

3. 11 Operationalization of the Study Variables.....................................................................1
3.12 Ethical Issues......................................................................................................................1
APPENDICES................................................................................................................................1
Appendix I: Cover Letter.........................................................................................................1
Appendix II: Questionnaire for Management officials of Matatu SACCOs with Offices
in Nairobi CBD, Kenya.......................................................................................1
Appendix IV: Work Plan..........................................................................................................1
Appendix V: Budget Estimate..................................................................................................1

vi
 LIST OF TABLES

Table 2. 1: Summary of Literature Review and Research Gaps.....................................................2

Table 3.1: Sample Frame................................................................................................................2

Table 3.3: Measurement /Operationalization of Variables.............................................................2

LIST OF FIGURES

vii
Figure 2.1: Conceptual Framework................................................................................................2

viii
 ABBREVIATIONS AND ACRONYMS

ANOVA: Analysis of Variance

CBD: Central Business District
CBK: Central Bank of Kenya
CEOs: Chief Executive Officer
DT SACCO: Deposit Taking Savings & Credit Cooperative Societies
FCF: Free Cash Flows
FOSA: Front Office Savings Activity
FSD: Financial Service Deepening
GDI: geographical diversification and profitability
GDP: Gross Domestic Product
GMM: Generalized Method of Moments
GoK: Government of Kenya
IMF: International Monetary Fund
KNBS: Kenya National Bureau of Statistics
KUSCCO: Kenya Union of Savings and Credit Co-operatives
Matatu SACCO: Matatu Savings & Credit Cooperative Societies
MMT: Metro Mass Transit
NACOSTI: National Commission of Science Technology & Innovation
NPV: Net Present Value
NTSA: National Transport & Safety Authority
OLS: Ordinary Least Square
PSVs: Public Service Vehicles
R&D: Research and Development
ROA: returns of Assets
ROA: Returns on Assets
ROI: Returns on Investment
SACCOs: Savings & Credit Cooperative Societies
SASRA: SACCOS Societies Regulatory Authority
SMEs: Small and Medium Enterprises
SPSS: Statistical Package for Social Sciences
WOCCU: World Council of Credit Unions recognizing Kenya

ix
 OPERATIONAL DEFINITION OF TERMS

Financial performance is the measurement of the end result of primary utilization of

firm assets to generate proceeds during normal operations of
firm strategies, policies and operations over a given period of
time . These outcomes are represented by the organization’s
market share which is measured using Growth in Capital and
Savings. Other measurements of financial performance may
include: profitability, liquidity, leverage and efficiency ratios

Investment Decisions is capital budgeting policies involving efficient capital outlay

of the firm’s current funds in the long-term assets in
anticipation of an expected flow of benefits over a series of
years.

is investment decisions which involve upgrading in terms of

Modernization either technology or operational change geared towards cost
cutting and operational efficiency

Replacement is investment decision where disposal of the old assets is done

and a new better or probably larger capacity assets are
acquired. The older assets are removed from the assets
register of the firm and new ones are introduced with new
values

Diversification is investment decision which entails change in operations in

terms of products offered, methods of delivery and efficiency
of operations. Line related business are added in
diversification to increase the firm revenue base while
enlarging the firms business

Matatu SACCOs is SACCOs formed by the matatu owners, be it individuals,

partners or collaborations to offer public transport in Kenya
and have got operational offices in Nairobi CBD

x
 ABSTRACT
Matatu SACCOs in Kenya play a pivotal role from both locally and nationwide perspective.
Even though it is widely known that matatu SACCOs have manifold benefits to the country, past
studies portray controversial debate over linkage between financial outlay decisions and returns
realized over the years. Therefore, the purpose of this research is to investigate the influence of
capital outlay decisions on the financial returns of matatu SACCOs with offices in Nairobi CBD
Kenya. Hence, the main objectives of this research paper is to examine the influence of
replacement decisions on financial returns of matatu SACCOs with offices in Nairobi CBD,
Kenya; to establish the influence of modernization on financial returns of matatu SACCOs with
offices in Nairobi CBD, Kenya; to find out the influence of diversification on financial returns of
matatu SACCOs with offices in Nairobi CBD, Kenya and to assess the moderating effect of
regulation requirements on financial returns of matatu SACCOs with offices in Nairobi CBD,
Kenya . The research is anchored on Q theory of investment, free cash flow theory, risk,
uncertainty bearing theory of profits and stakeholders’ theory. This research will apply
descriptive survey research design. The four hypotheses will be tested at 95% confidence level
using multiple regressions models. The target population is 547 matatu SACCOs registered
under NTSA out of which a sample size of 220 will be obtained using convenience sampling
method. Data will be obtained using a structured questionnaire whereby drop and pick
methodology will apply. Covid-19 precautions will be incorporated by sanitizing the
questionnaires as they are being issued and when collected back and also use of the same
questionnaire in soft copy format as the case applies. The consent of respondent to participate as
well as to decline to answer questions or terminate the interview prematurely shall be upheld.
There will be truthful disclosure before and after interview. The information obtained from the
respondent shall remain confidential as well as the respondents and their details. The research
shall take due care to obtain truthful information. The data will be analyzed using descriptive,
Pearson product-movement of correlations and inferential statistics. Validity shall be used to

xi
ensure professionalism while reliability shall be used to ensure consistency. Research findings
will be displayed using tables and charts.

xii
 CHAPTER ONE

BACKGROUND OF THE STUDY

1.1 Introduction
Investment decisions and financial performance are in separable variables in the business world
globally. However, all investment decisions do not respond the same way to financial
performance in every environment. While investment decisions rage from; acquisition,
expansion, replacement, diversification and disposal of existing business. Each of the above
mentioned is unique in regard to internal and external business environment. (Santalo & Becerra
2004) observed that, it is not only the investment decisions that are made and the business
environment that affect financial performance. But, the type of industry that an investor choses
and business strategies are of equal consequence. (Suzana, Bogdan, and Ivanovic 2016)
mentions the Importance of assessing the useful lifetime of an investment in regard to
profitability. In this research, the scholars argue that the residual value of an investment is
important since it determines the disposal and replacement decisions or complete disinvestment.
According to (Rajini & Konara 2016) the cost of any of the investment decisions an investor
chose requires capital outlay. While choosing to work with old assets beyond their useful life
attracts unsustainable repair and maintenance costs. It may mean going out of business. Salawu
& Rufai (2017) argued that replacement decisions require proper timing for the firm to achieve
cost effect decisions

Matatu organizations (SACCOs) are self-styled financial asociations that bring together members
for the purposes of pulling savings, issuing loans as well as attending to emerging needs of their
members (Kenya Union of Savings and Credit Co-operatives (KUSCCO, 2009)). The origin of
this organization can dates back in 1908 from European settlers who formed the Lumbwa Co-
operative Society around Kericho as stated by (Kiragu, 2014). As per (SASRA, 2013), this
movement has been highly ranked with World Council of Credit Unions recognizing Kenyan
SACCOs as most highly placed organizations with remarkable growth rate (WOCCU, 2013).
Information from the ministry of cooperatives, development and marketing indicate that
SACCOs have been growing by 25% per annum in the past six years, (GoK, 2011). SACCOs
are widely spread in the kenyan economy ranging from agricultural, handicraft, juakali,

1
transport, housing and development, building and construction, consumer services, banking and
finance (Mang’ana, Rotich, Hassan and Orwa, 2017). The main objective of the Kenyan co-
operative movement was to induce economic growth by focusing on achievement of desired
outcomes through mobilization, strengthening of the co-operative movement, improving co-
operative extension service delivery, improved corporate governance, access to larger markets
and marketing bargaining power (IMF, 2007).

Matatu SACCOs are the biggest contributors to the growth of public transport (Shitanda, Bosire,
& Kiveu, 2018 and NTSA, 2015). The Economic Survey of kenya (2017), by the end of 2016,
there were 18,573 registered cooperatives, spread over various sectors in Kenyan economy. It is
evident that in Kenya, the public service vehicles (PSVs), otherwise known as “Matatu”, are the
major players in public transport controlling over 80 per cent of the public transport. Further, it is
proven that 46% of the Gross Domestic Product is contributed by matutu SACCOs,they employ
more than 500,000 people while their contribution to national savings is about 35% . The asset
base of matatu SACCOs in Kenya is estimated to have increased from Ksh 216 billion to ksh248
billion in the year 2010. Being the largest sector in Africa, it is ectamate to account for 64% in
terms of savaings, loans and asset base in the content (SASRA 2011). Deposit taking SACCOs
under SASRA (reg.177) are estimated to control over KShs 73 billion in turnover (Economic
Survey, 2016), kshs 4 billion insurance premiums per annum and ksh 1billion taxes contribution
to the exchequer annually. It is also estimated that these SACCOs had over 3.1 million active
members and mobilized over Ksh.272 billion ($ 2.6 billion) in savings and carried loans of
Ksh.288 billion equivalents to $ 2.79 billion (Ototo, 2017). The adoption of financial products in
these organizations witnessed growth in savings from 9.2 to 10.6 in 2009 and 2013 while ratios
for credit absorption were 3.1 and 4.0 respectively, this points to increase in operational activity
(CBK & FSD Kenya, 2013). SASRA, (2011) it is evident that the asset base (investment) and
financial performance of matatu SACCOs is pivotal in economic development.

1.1.1Financial Performance
The technic that a firm applies to measure financial performance ought to take into account the
unique business environmental both internal and external that the industry operates (Santalo’ &
Becera 2004).This ensures that the business uncertainties for which the proprietor receives a

2
reward are well captured in the measurement ( LeGuin 2013). This is so by focusing on the cost
to benefit analysis where by the management ensures returns on capital exceed cost of capital
(Esokomi & Mutua, 2018). Financial performance is the measure of how an organization utilizes
its assets in generating revenue. It is also a gauge used to evaluate the level of efficiency the
business entity has employed its capital outlay to generate returns (Kiaritha, 2015).

This methodology portrays how an organization has utilized its assets efficiently to create
revenue which enhances financial soundness of a firm. According to (Neely, 1999), the indicator
of financial performance are; profitability, liquidity, leverage and efficiency ratios that can be
utilized to gauge financial performance. The use of profitability ratios is more preferred. They
include; return on assets, return on equity and profit after tax ratios (Hadi, 2019). This study will
consider market share as the aspect of financial performance of matatu SACCOs which will be
measured using growth in capital and savings. However, (Karanja 2012) whatever method one
uses, the following criteria may apply; single period, internal, external, absolute, single period,
mean or growth rate over a number of years.

Market share is an appropriate measure of financial performance for matatu SACCOs business. It
depicts the ability of a firm to thrive beyond business competition and eat in to another firm’s
market base. Matatu SACCOs business is very unique. Conventional methods of measuring
financial performance may not address every aspect of this business to give a true picture of how
assets have been utilized to generate revenue for the business. According to (Mwaura 2014)
among the determinants of financial performance of public transport are, operative strategies,
operative culture and government regulatory.

In the public transport industry government regulations is exercised by the National Transport
and Safety Authority (NTSA). This is according to (NTSA ACT 2012) Legal notice no 33.
(Wagereka 2013) findings were, that the role of government regulatory frame work was to
moderate the performance of SACCOs. Where government regulations is present, the
government control entry, competition and the manner in which business is conducted. Matatu
SACCOs are subject to government regulations. The government makes policy changes which
affect the daily operation of business. It is a requirement by the NTSA that matatu SACCOs

3
oversee the discipline of their staff. The National transport & regulation (NTSA ACT 2013)
advance compliance with labor laws, statutory deductions, work injury benefits, health and
safety work place and written contract of employment as reasons for convergence into SACCOs.
Among the benefits that accrue to the investors include, low running and operational cost,
motivated and disciplined staff, improved productivity per matatu and capital accumulation for
easy borrowing to the investors through savings in the SACCO.

1.1.2 Investment Decisions

Investment decisions are expenditures that relate to large capital outlay in expectation of future
cashflows. They require careful planning and good feasibility study in employing current funds
efficiently in the long-term assets in anticipation of an expected flow of benefits over a series of
year. The long – term assets do have the characteristic of generating both costs and revenues for
a period exceeding one financial year (Mweresa & Muturi, 2018). Capital budgeting decisions
may fall under; diversification, acquisition, modernization, expansion and replacement of the
long-term assets. Disposal of a division or business (disinvestment) is considered as a capital
budgeting decision. Research and development, advertising and change of supply chain are of
longterm consequences in the organization’s expenditures and benefits, and therefore, may be
considered under capital budgeting decisions. This study incorporates replacement,
modernization and diversification. (Musau, Ariemba, &Evusa, 2016). While investment
decisions are many, the business industry that an investor chose determines the business
strategies that are adopted (Mwaura 2014). Where the business revenue is dependent on
machinery, then the most important question is; how to replenish, the best technology and
maximum utilization for maximum cashflow (Größler, Bivona Fuzhuang 2015). The matatu
business has to employ a replacement strategy that assures the investor of an effective and
efficient vehicle, a modernization strategy that adopts the most efficient and reliable operation
mode and a diversification strategy that assure of the maximum cashflow from the industry.

Replacement decisions refers to substituting of existing assets with new ones which are better in
accommodating large input volumes, refined and quicker production capacity coupled with less
production costs (Bennett and Rajlich, 2000). The resultant effect is increased profit margins due
to reduced maintenance costs and increased output capacity. Assets depreciate in the course of

4
business and technological innovation dictate a change in the manner of doing business. The firm
has to sell off its old assets and acquire new ones in order to remain in business. These decisions
help to introduce more efficient and economical assets and therefore, are also called cost –
cutting investments (McKay, 2019 and McKay, Sharma and Uddin, 2020). These decisions
involve substantial technological improvements and change of operations to expand revenue as
well as reduce costs (Pandey, 2008). In this study, the matatu SACCO replacement decision is
gauged using capital accumulation in order to grow or disposal and acquisition of assets, which
is in form of acquisition of cost-effective vehicles and acquisition of large carrying capacity
vehicles (Czerwonka 2015).

Modernization means upgrade, adaptation, assimilation of the most recent innovative changes in
the firm’s operative procedure. Modernization of firms assets is an important step toward
differentiation of its products and services so as to attain a competitive advantage over its peers
(Svetlana, & Marina, 2018). In (Hezron & Muturi 2015) technology as a modern business
strategy was found to significantly influence performance of financial SACCOs in Kenya. Thus,
corporate modernization strategy becomes important for the firms to have a competitive edge in
dynamic surroundings with an aim of increasing profitability (Phung and Mishra 2016). In
resource-based theory firms are assumed to be homogeneous. The firm that breaks away and
uses its resource to gain an upper hand over its competitors breaks way to be unique or
heterogenous. In this study, the aspect of acquisition of Modern Coaches, modification of
vehicles, modernization of operations and socially responsible investment which refers to the
strategy used by investors to consider the firms’ environmental, social, and ethical impact and
their corporate governance before investment decisions (Cooper and Weber 2020; Daugaard
2020), will be utilized to gauge modernization decisions for matatu SACCOs with fleets of
vehicles plying between Nairobi CBD and other regions in Kenya.

On the other hand, diversification is venturing in to other related business which increase both
market visibility and revenue turn over to the core business, it may some times be something
very new totally unrelated to the core business. In other words theses a business which the firm
can do without necessarily expanding its capacity requirements. Diversification has become a
popular strategy among diverse businesses in various sectors willing to surpass competitors
(Ulrich & Haug, 2018). Whether related or unrelated, it is the way to conquer new markets while

5
improving firms productivity. Su and Tsang (2017) argued that diversification is when a firm
develops a new product either dependent on the core business or a product that is totally
independent from the core business with an aim of going in to new market to offset loses from
one product line or basically to conquer new horizons. Oladele (2020) looked at diversification
as a power engine to competitive advantage while reducing risk of the business going under and
creating market synergy. This success of this business strategy is sensitive to industry, time and
regions (Krivokapic, Nladimir & Stogic, 2017). Diversification for matatu SaACCOs with
vehicles plying between Nairobi CBD where they have offices and the other regions will be
measured investment collaborations with insurance agencies, refilling stations, hotel services and
parcel delivery services .

Therefore, it is important to balance between diversification as a strategy and the overall

corporate philosophy to ensure strategic fit. Zheng-Feng and Lingyan (2018) claimed
diversification serves to; vary firms products, enlarge business territory coverage in the market
and reduce the risk of loss while distributing investment. The current study will utilize matatu
SACCO Investment Collaborations such as acquisition or collaboration with transport support
business ventures such as insurance agencies, refilling stations and hotel Services and offering of
parcel delivery Servicesin gauging diversification decisions.

Past studies on investment and performance from global, regional and local perspective portray
diverse debates. In Pakistan, Mehmood, Hunjra and Chani (2019), assessed the effects of
corporate diversification against financial structure on the firms’ return on investment. Finds of
the study were that product variation and investment distribution highly influenced firms’
financial returns. Subramaniam and Wasiuzzaman (2019) investigated on the relationship
between geographical distribution of investment and return on investment. The study showed
mixed findings. Tu DQ Le (2021) explored the impact of geographic investment distribution and
income diversification on bank stability in Vietnam between 2006 and 2015. The results showed
that in general geographic investment distribution can increase bank stability while income
diversification per se does not. In Indonesia, Santoso (2019) assessed the impact of capital outlay
decisions applied against appropriate sources of funds on the expected return of the company.
Results showed that the capital structure affected expected return and firm value.

6
 In Nigeria, Oyedijo (2016) interrogated on the relationship of product -market enlargment
strategy on growth and expected return. Yobo, (2018) from Ghana, examined state involvement
in public transport delivery. All those research findings indicated dissimilar outcome. In Kenya,
Odhiambo (2019) investigated the effects of portfolio distribution against Financial
Sustainability of DT SACCOs. Mutire, Kadima and Juma (2020) investigated the relationship
between diversification on loan default rate in non-deposit taking SACCOs, Kakamega County
Kenya. Also. Ogada, Achoki and Njuguna (2016), assessed the effect of investment distribution
against expected returns of merged institutions and Lomuria, Wanyama, and Mamuli, (2019)
aimed at establishing the effect of investment enlargement strategies and expected returns of
SACCOs in Turkana County, Kenya. Findings of those studies gave controversial and dissimilar
outcome than expected.

1.1.3 Matatu SACCOs with Offices in Nairobi CBD

The meaning of SACCOs is savings and credit co-operative organizations. Their core mandate is
resource mobilization and provision of credit to members both owners and users. To state or
imply otherwise negates the motive, intention and spirit of the co-operative movement (James,
Gathungu et al 2018). Muraguri (2014) Savings and credit cooperatives exist to meet important
human aspect of accumulation and redistribution of capital without taking risks and handing over
too much power to moneylenders. SACCOs operate through board of directors who employ the
staff that manage them. The board of directors is required by law to report to the members at the
AGM or ADM. It is during the AGM that members assess the performance of the SACCOs and
pass resolutions. Whatever investment members do can only be applied to public transport under
the name of their SACCOs. SACCOs are about common interest and public transport is what is
common with members of matatu SACCOS. According to legal notice issued on 23 December
2010 by the ministry of transport. It is a requirement within the republic of Kenya to belong to
SACCOs in order to obtain a license to run public transport or to belong to a limited company
with an exception to taxis.

Matatu SACCOs with offices in Nairobi CBD and with public transport service vehicles plying
between Nairobi and other regions of Kenya are estimated to control 80% of the public transport

7
with annual turnover of KSh 73 billion on average (Republic of Kenya Economic Survey, 2016).
These SACCCOs generate approximately KSh 4 billion insurance premiums every year and
remits KSh 1 billion taxes annually. Matatu industry has grown to take full control of the public
transport system in Kenya (Klopp and Mitullah 2015). Matatu SACCO ownership structure with
offices in Nairobi CBD and with vehicles plying to other regions of Kenya is hybrid in nature
whereby the SACCO members are the owners of the SACCO and at the same time they invest in
the matatu vehicles offering transport services within and without Nairobi zone. Further, they
actively participate in the running of the SACCOs in different capacities such as managing
directors or CEOs, managers and supervisors (NTSA, 2020). These members save and borrow
money so ass to invest in matatu SACCO transport opportunities or otherwise (Ototo, 2017). The
financial performance of the Matatu industry may be looked at through the growth indicators
such as the number of new Matatus that enter the designated routes, the profitability of the
sector, the lifespan of the Matatus, the number of jobs the sector creates every year, the growth
of the Matatu SACCOs (Chepkosgey, 2015).

1. 2 Statement of the Problem

Matatu SACCOs contribute immensely and positively to the growth of the economy. In Kenya;
they promote the saving culture for its members and provide them with loans at a low interest
rate to better their living standard (Klopp and Mitullah 2015). However, matatu SACCO have
portrayed undesirable financial performance. For instance, since the matatu SACCO movement
was introduced in Kenya 2010, it has witnessed decrease in growth. In 2011, the sector generated
a GDP of 5.0%, 4.7% in 2012, 4.5% in 2013 and 4.2% in 2014. Further, the sector registered a
GDP contribution level of 3.7% percentage in 2015, 4.1% in 2016, 3.9% in 2017, 4.2% in 2018
and 4.2% in 2019 (KNBS, 2020) Competition in the market is also a threat to the survival of
matatu SACCOs. Banks have gone to an extent of issuing unsecured loans to their clients and
non-clients; this non-price competitive tool has posed a challenge on matatu SACCOs’
performance (Mugo, Muathe & Waithaka, 2019; Odhiambo, 2019). According to the Economic
Survey Report (2015), this statistical analysis shows a trend of a decrease in growth in the sector
between2010 and 2014 in the economy and a stagnated growth between 2015 and 2019.

8
Matatu SACCOs are also prohibited from investing in non-earning assets or property and
equipment in excess of 10% of total assets, of which land and buildings shall not exceed 5%
(SACCO Societies Act, 2008). Default on loan repayments poses the greatest risk to stability of
the multi-billion shilling savings and credit co-operative movement (SASRA, 2013 Maina,
Kinyariro & Muturi, 2016). To be financially sound matatu SACCOs have opted venturing into
other investments (Munene, Ndambiri & Wanjohi, 2019). In connection to this, those SACCOs
have endeavored to improve on their performance by adopting diverse investment opportunities.
Past studies (Mehmood, Hunjra and Chani (2019); Zakkies, 2016; Kiaritha, 2015; Kiaritha, 2015;
Esokomi, & Mutua, 2018; Kiragu, 2014; Shitanda, Bosire and Kiveu, 2018 and Jepkorir, Muturi,
and Ndegwa, 2019) which focused on investment decision and financial performance of public
transport related organizations such as matatu SACCOs had controversial findings. Therefore, it
is against this backdrop that the current study endeavor to fill the knowledge gaps identified by
investigating the influence of investment decisions by matatu owners on the financial
performance of matatu SACCOs that operate matatu which ply between Nairobi CBD and other
regions of the country, Kenya.

1.3 General Objective

The overall aim of this research is to investigate the influence of capital outlay decisions on the
financial performance of matatu SACCOs that operate matatu which ply between Nairobi City
county and other regions of the country, Kenya.

1.3.1 Specific Objectives

The specific objectives of this research are: -
i) To determine the influence of replacement decision by matatu owners on financial
performance of matatu SACCOs with offices in Nairobi CBD, Kenya.
ii) To assess the influence modernization decision by matatu owners on financial performance
of matatu SACCOs with offices in Nairobi CBD, Kenya.
iii) To explore diversification decision by matatu owners on financial performance of matatu
SACCOs with offices in Nairobi CBD, Kenya.

9
iv) To examine the moderating aspect of regulation requirements on the relationship between
investment decisions and financial performance of matatu SACCOs with offices in Nairobi
CBD, Kenya .

1.4 Research Hypothesis

The research study is hypothesized as follows
H01: There is no significant influence of replacement decision by matatu owners on financial
performance of matatu SACCOs with offices in Nairobi CBD, Kenya.
H02: There is no significant influence of modernization decision by matatu owners on financial
performance of matatu SACCOs with offices in Nairobi CBD, Kenya.
H03: There is no significant influence of diversification decision by matatu owners on financial
performance of matatu SACCOs with offices in Nairobi CBD, Kenya.

H04: There is no significant moderating effect of NTSA regulation requirements on the

relationship between investment decisions and financial performance of matatu SACCOs with
offices in Nairobi CBD, Kenya

1.5 Significance of the Study

The study will be significant to several stakeholders: For the policy makers in Government, the
findings of this study will inform their policy formulation and implementation on matatu
SACCOs. From the research findings of this study, policy makers will be able to understand the
dynamics affecting matatu SACCOs in Kenya and how they can be dealt with.

The outcome of this research is crucial to the matatu SACCO management team and
shareholders/owners of matatu. Through the findings of this study, the owners and managers of
matatu SACCOs are able to expand their knowledge on determinants of their financial
performance and the manner in which it affects their business. This informs the formulation of
necessary investment policies and operational practices that can influence the overall financial
performance of the Matatu transport businesses in Kenya.

10
The results of this research will be a reference for point for future studies and future scholars.
Through the findings of this study, future researchers and academicians find a source to refer to
in as far as Matatu businesses are concerned.

1.6 Scope of the Study

This research aims at investigating on the influence of investment decisions on financial
performance of matatu SACCOs. The research focuses on the influence of replacement,
modernization and diversification decisions by matatu owners on expected return of the Matatu
transport businesses in Kenya. The scope of these investigations also focuses on matatu SACCOs
which have offices in Nairobi CBD whether it serves as an operating point or the headquarter for
the SACCO and also their vehicles ply between Nairobi City and other regions. Further, the
study will have a timeframe duration of focus of between 2016 up to 2020.

1.7 Limitations of the Study

This research will be limited to matatu SACCOs with matatu vehicles plying between Nairobi
CBD and other regions of the country, Kenya. So, not all categories of public service vehicles
will be considered. Reluctancy or unwillingness to fill the structured questionnaire and even the
time to participate in the research a limitation anticipated by the research. Consequently, written
authority by Kenyatta University graduate school and NACOSTI to make the whole process
authentic and acceptable amongst the targeted players shall be mitigating measures over the
limitations. This shall be achieved by briefing that the information shall be for academic
purposes and safety of identity shall be observed.

Covid-19 poses researcher-respondent interaction challenge and the approach of drop and pick
questionnaires at a later date may not apply for it entails issuing physical questionnaires. To
overcome this challenge, the researcher will adopt an online questionnaire using google forms
and with request of e-mails for the respondents, this will make the exercise more successful.

1.8 Organization of the Study

This research is structured in to three parts, namely; part one part two and part three. Part one
comprises the research background and commences with introduction to the study, with a focus

11
on SACCOs and the investment to financial performance connectivity. It then highlights
statement of the problem, general aims and specific aims of the study, research hypotheses,
significance of the study, scope of the study and limitations of the research.

Chapter two majorly reviews past studies from both empirical and theoretically, simultaneously
highlighting conceptual, methodological, contextual and theoretical knowledge gaps to be filled.
The gaps identified are summarized in a table and a conceptual framework.

Chapter three entails research methodology. It points to general guideline of the study process
and breaks the whole process by portraying research design to be adopted, population and
sampling methodology to be adopted to derive at the sample size, procedure of collecting data
and how to collect data itself and the methodology of analyzing the data and how to present the
outcome thereof. In the same chapter validity and reliability of the research instrument is
indicated, empirical model and finally ethical consideration statement is included.

12
 CHAPTER TWO

LITERATURE REVEW

2.1 Introduction
Investment decisions and financial performance of matatu SACCOs linkage plays a fundamental
role in the economy. The correlational relationship between these two variables is anchored on
various theories.

2.2 Theoretical Review

This study is based on the following three theories, namely; the modern financial portfolio
theory, opportunity cost theory and risk, uncertainty bearing theory as discussed below
2.2.1 Modern financial portfolio theory.
Harry Markowitz (1952) most investments are either high risk high return bearing or low risk
low risk bearing. Investors have the opportunity to choose an optimal mix of two or more
investment combination based on an assessment of their individual tolerance to risk. In an
investment risk and return are involved. Such risk should be assessed on how it affects the entire
portfolio. According to this theory, the investor can construct a portfolio several assets resulting
to a greater return without increasing the level of risk involved

The modern financial portfolio theory argues that investor is risk averse. They therefore prefer
less risk portfolios to riskier ones for a given level of return. Risk averse means that investors
prefer to invest in multiple asset classes in order to diversify risk. Based on statistical measures
such as variance and correlation, a single investment performance is less important than how it
impacts the entire portfolio. The weighted sum of the individual assets forms the expected return
on the portfolio while the portfolio risk is a function of the variance of each asset and the
correlation of each pair of assets

Risk averseness is the drive behind investment diversification. This study is using diversification
as a variable in the measure of financial performance which is in other words expected return.
Hawley (1907) argued that profit is the reward for bearing risk. In investment sometimes it is

13
impossible to mitigate risk by a single investment. Modernization and replacement the portfolio
that matatu owner need to mitigate risk.
.

2.2.2 Risk, Uncertainty bearing theory of profits.

Hawley (1907) developed the risk bearing theory of profits. It states that profits is a reward for
bearing the risk. Some risk are inherent in the business. For instance in the matatu saccos,
accidents and unfaithful staff are inherent risk not to mention driving standards, This makes
every business almost speculative. The essential function of an entrepreneur is to take risk. This
is the investment function. This function is not transferable to any other party in the business.

The degree of risk varies in different businesses. According to Hawley (1907) there is a positive
relationship between risk and profit-higher the risk greater is the possibility of profit and smaller
the risk, the lower the possibility of profit. In this way profit is a reward for risk taking. It is this
profit that is the measure of performance in this study. Knight (1921) improved the theory of
Hawley’s risk theory of profit. According to knight (1921) risk is a situation in which statistical
probability of outcome can be determined and can be minimized or reduced to zero. Profit is the
reward for bearing uncertainties, which are not insurable, but risk can be insured.

Uncertainties arise from a number of changes in the market place which the entrepreneur cannot
predict with certainty. Change in market place on supply and demand, innovation, economic
policies and business cycle. LeGuin (2013) puts it in a decent business language that uncertainty
is a broad range of possible outcomes and complex, which makes it impossible to define even
after making scenario analysis since it is impossible to determine what future events will be

The theory is relevant to this study because it attempts to measure the uncertainty the investor
has born to earn the profits generated by their investments.

2.2.3 Opportunity cost Theory

Gottfried Haberler (1936) argued that resource are always scarce and for every investment
choice made there is an equal opportunity forgone. The cost for the forgone opportunity is the

14
opportunity cost for the choice made. Opportunity cost is the cost of second good that must be
given up to release just enough resources to produce one additional unity of the first good. No
assumption is made that labor is the only factor of production or that labour is homogeneous.
Nor is it assumed that the cost or price of a commodity depends on or can be inferred exclusively
from its labor contents. Therefore, the nation with lower opportunity cost in the production of
any commodity has a comparative advantage in that commodity

This study focuses on replacement, modernization and diversification decisions and financial
performance of matatu SACCOs in the public transport industry. Investment decisions in this
sector are many. The choice of the three variables named determines other business strategies in
this industry and determine the risk of the investment combination done (Harry Markowitz
1952). Mwaura 2014 the best business combination model strategic ought to be adopted for
maximum return. By assessing the opportunity cost of an investment decision, the investor is
sure of making the best chose in the investment and assure way of getting the highest returns.

2.3 Empirical Review

This section reviews previous studies related to the current study. It grants detailed highlights of
literature on diverse investment decisions and their influence on financial performance of firms
cutting across several sectors in the economy.

2.3.1 Replacement and Financial Performance

As an investor considers replacing an asset, it is necessary to factor in the existing asset value
(Munoz-Porcar et al., 2015). Past studies have endeavored to portray this sense. In the study of
(Andreas, Enzo & Fuzuhuang 2015), examined the relationships between assets replacement
strategies and performance in machinery rental business. The main objective was to evaluate
performance effects of assets replacement. Primary data was collected using questionnaires and
models built to generate different scenarios. Simulation analysis was used to analyze the results.
The simulation analysis indicate that natural retirement of machines generate surprisingly good
financial performance. Replacement strategy that takes advantage of lower purchase and higher
disposal prices. This strategy only performs better in large firms while it generates less revenue
in small firms.

15
Another study was conducted by Salawu & Rufai (2017) investigated the effects of machine
replacement cost on profitability of feed mill industries in Ibadan Metropolis. They used
multistage sampling technique in selection of respondents. Data was collected using
questionnaire and analyzed using descriptive statistics, gross margin analysis, replacement model
analysis and regression analysis. The study revealed that hammer mill/grinder, mixer and scale
as the most common machines used by the millers and average age of the machine is six years.
The machine had a total replacement cost of N909, 095.30 and feeds mill average profit of N63,
100,000 per annum. Regression analysis showed a positive relationship between machine cost
and profitability of feed mills. Other variables such as marital status, education of respondents,
ethnicity, credit access and membership of association were also found to be significant.

Musau (2016) focused on the effect of investment decisions on financial performance of Savings
and Credit Cooperatives in Kitui Central Sub-County. The study was prompted by the down
slopping trend in performance of SACCOs in Kenya due to a disinvestment ethos. The specific
objectives were; to assess the effect of replacement decision on financial performance of
SACCOs in Kitui Central Sub-County, to find out the effects of expansion decision on financial
performance of SACCOs in Kitui Central Sub-County, to investigate the effect of renewal or
modernization decision on financial performance of SACCOs in Kitui Central Sub-County, and
to evaluate the effects of Research and Development (R&D) decision on financial performance
of SACCOs in Kitui Central Sub-County. The study adopted an empirical study design for a
time-series data of a ten-year period from 2006-2015. The research was undertaken on all
twelve (12) SACCOs located in Kitui town thus utilizing a census technique in
selection of respondents. Simple multivariate analysis was used for data analysis,
while Karl Pearson’s correlation was used in determining the correlation within
variables. The results of study were produced using data analysis workbook; the
Statistical Package for Social Sciences (SPSS-version 21). Data presentation was done
using tables. The study findings indicated that replacement decision, renewal
decisions and research and development decisions positively contributed to SACCO
performance as measured by dividends while expansion decisions had a negative
contribution. On the other hand, expansion decision, modernization decision and

16
research and development decision had a positive contribution to SACCO financial
performance as measured by surplus or deficits while replacement decision had a
negative effect. The study concluded that only research and development decision had
a significant effect to SACCO performance while expansion decision, replacement
decision, and research and development decision had no significant effects to SACCO
financial performance. Thus, not all of investment decisions affect financial
performance in SACCOs.

Contrary to the studies of Andreas, Enzo & Fuzuhuang (2015), Salawu & Rufai (2017), Musau
(2016) Muriuki, Muraguri and Kyalo (2018), did another research where the investment aspect
was taken as the dependent variable. They aimed at investigating the influence of financial
literacy on investment decisions of the Sacco funds in Kenya. The study adopted survey and
descriptive research design and targeted all the 34 active Sacco's in Laikipia County. A sample of
14 Sacco's was selected using random sampling. The respondents were SACCO board of
directors. Data was analyzed using SPSS and presented through frequency charts, tables and
graphs. Financial literacy was regressed against investment decision and a coefficient of 0.621
was obtained. The results showed that financial literacy significantly influenced investment
decision with a p-value of 0.007 at 95% confidence level. This study considered investment
decision as the dependent variable and the results were significant. Hence, it represents a
conceptual knowledge gap for the current study is concerned on whether investment decision
significantly estimate financial performance of matatu Saccos if financial performance is market
share and gauged using growth in capital & savings of the matatu SACCOs.

Also, Makiche and Nyamute (2016) in a similar study to that of Muriuki, Muraguri and Kyalo,
(2018) sought to find out the effects of financial services, namely: credit services, deposit and
savings account services, and training, had on the investment decisions of SMEs in Bomet
County, Kenya. The study measured investment decision as the how, when, where and how
much capital can be spend in line with the aim of making a profit. The study employed
descriptive research design and questionnaire was used as the main instrument of data collection.
The researcher worked with a sample of 100 SMEs drawn from a population of 1,008 businesses

17
licensed by the county government of Bomet. Data was analyzed using both excel and the
Statistical Package for Social Sciences (SPSS) where patterns and relationships were established.
A response rate of 74% was achieved which was then subjected to analysis. The multivariate
regression model used established that each of the independent variables had a positive influence
on the investment decisions of SMEs in Bomet County with credit services showing a
comparatively higher effect. The ANOVA carried out showed that there was a positive
correlation among the variables, but that the relationship was not significant enough to explain
the variation. Since the results were statistically insignificant. A further study is necessary
interrogate the prediction power of investment decision on financial performance of matatu
Sacco.

Koech, Koske and Cheboi (2020) investigated on the influence of representativeness, heuristic
behavior, Investment Decisions, and Financial Performance of Small and Medium Enterprises in
Nairobi, Kenya. The research evaluated the direct influence of representativeness heuristic on the

financial performance of the SMEs in Nairobi County. In addition, it scrutinized

the mediational effect of investment decisions on the relationship between
Representativeness heuristic and the financial performance of the said SMEs. The study was
guided by Heuristic theory and Modern portfolio theory. The study used an explanatory
research design and arranged the samples into strata. Data collection was done through
self-administered, structured questionnaires and elements were grounded on a 5-point
Likert scale after which data analysis was done using descriptive and inferential statistics.
The study hypotheses were tested with the use of multiple regression models and Hayes
process macro. The results showed that Representativeness Heuristics significantly predicts
SME’s financial performance and this relationship is partially mediated
by Investment decisions

Kerubo and Mwangi, (2019) sought to determine how investment decisions impact the efficiency
of deposit taking SACCOs in Nairobi. The study’s population was all the 43 DT-SACCOs in
Nairobi County, Kenya. The independent variable for the study was investment decisions with
four measures; investment in real estate, investment in government securities, investment in

18
fixed deposit and investment in shares. The control variables were liquidity and firm size.
Firm efficiency was the response variable which was the primary focus of the study.
The study utilized secondary data from 2014 to 2018 (5 years) on annual basis. A
descriptive cross-sectional design together with the multiple linear regression model
were used for the analysis of the variables. The findings gave an R-square value of 0.317
meaning that 31.7 percent changes in the efficiency of DT-SACCOs in Nairobi, Kenya can be
attributed to the seven selected predictor variables while 68.3 percent changes of
efficiency of DT-SACCOs was attributable to other factors outside the scope of the
study. It was further revealed that the predictor variables showed a strong correlation
with efficiency (R=0.563). ANOVA results show that the F statistic was substantial at
5% level with a p=0.000. This shows the model was suitable for the study to provide
an explanation of the variables. The results also showed that investment in real estate,
investment in government securities and investment in shares produced positive and
statistically substantial values for this study while investment in fixed deposits,
liquidity, firm size and age were found to be statistically insignificant determiners of
efficiency.

The empirical studies reviewed under investment and financial performance conceptual
perspective in this study shows that the aspect of investment decision was treated in diverse ways
by different researchers. In some cases, the variable played the role of predictor such as the study
of Santoso, (2019) and other studies considered investment decision as the dependent variable as
it was in the case of Muriuki, Muraguri and Kyalo, (2018) and Makiche and Nyamute (2016). In
fact, in other studies such as Koech, Koske and Cheboi (2020), investment decision was treated
as a mediating variable.

Rajini and Konara (2016) observed that all assets deteriorate over time and their failure will
result to maintenance costs. This requires a lot of physical management, which in turn affects
profits. Replacement of assets require a lot of capital outlay. The main objective of Rajini &
Konara (2016) was to assess the relationship between assets management and profitability of an
organization. The study was interested in comparison between physical assets management,
repairs, replacements and decision-making. The study exploited secondary data obtained through

19
financial statements. Its findings were that optimal utilization of assets leads to increased
production; reliability as well as improving the organizations return on capital as well as
increased shareholders wealth.

As pointed out in this study, failure to replace machines when they need to could lead to high
power consumption, high maintenance costs or even increase the risk of accidents and
calamities. On the other hand there could be substantial losses due to unnecessary replacements.
Whether to repair or replacement presents a challenge in which the best option has to be
exercised.

Where the investment decision variable was incorporated, whether as a dependent or

independent variable, the research findings were dissimilar with some cases portraying
significant and insignificant association with other variables. This is a conceptual gap that need
to be revisited. Also, the common predictor, the investment decision was used to estimate
dependent variables such as financial sustainability, financial performance, firm value and
efficiency of some goals. This calls for further investigation to establish whether significant
influence exists between investment decision and financial performance of matatu SACCOs
putting into consideration the aspect of replacement as measured by purchase of matatu vehicles
which are more cost-effective , large carrying capacity.

2.3.2 Modernization and Financial Performance

Modernization is the process of replacing legacy technologies with newer, more innovative
platforms and services to streamline rule-based business processes, alleviating strain from the
human workforce. Organizations across the globe continue to be propelled into the “new normal”
of digitally-driven business practices. Businesses are consistently looking for new ways to
digitize and enhance their existing processes, along with the human workers that encompass
them (Dell Boomi IT and Business Report, 2020).

Researchers in several diverse studies have endeavored to portray this fact. For instance,
Morwabe and Muturi, (2019) looked at the effect of investment decisions on financial
performance of deposit-taking savings and credit cooperative societies in Nairobi County,

20
Kenya. The general objective of the study was to establish effect of investment decisions on
financial performance of DT SACCOs in Nairobi County, Kenya. Specific objectives of study
included: assessing effect of FOSA, Government Securities, Fixed Deposit Account and Shares
investment decisions on financial performance of DT- SACCOs within Nairobi County.
Secondary data for five years that is 2014-18, for 43 DT-SACCOs was collected from SASRA
and financial statements of specific DT-SACCOs; this data was analyzed using SPSS version 25.
ROA was used as a measure for financial performance. Descriptive research design for a
quantitative time series data was adopted using a census technique. Hypotheses were tested using
correlation and regression analysis. Results indicated that FOSA have positive significant
association with financial performance of DT-SACCOs. Secondly, Government securities
indicated a positive significant and moderate relationship on financial performance of DT-
SACCOs. Fixed deposit account had a significantly positive but low influence on financial
performance of DT-SACCOs. Shares had a positive significance and substantial influence on
financial performance of DT-SACCOs. The study found out that the model containing FOSA
activities, government securities, fixed deposit account and shares as investment decisions had a
strong influence on changes in DT-SACCOs profitability.

On the other hand, Mochoge (2015) aimed at determining how capital budgeting practices,
which is a sub-set of investment decision influenced returns in Matatu businesses. The
predicting variables were capital budgeting techniques, cost of capital, and operation costs of
Matatu business in Kisii County. Therefore, the specific objectives were, to; determine the
influence of budgeting techniques on returns of matatu SACCOs in Kisii County; to evaluate the
influence of cost of capital on the on returns of matatu SACCOs in Kisii County and to assess the
influence of operating cost on the on returns of matatu SACCOs in Kisii County. The research
employed a survey design where primary data was collected through the use of questionnaire,
and stratified random sampling method was used to select respondents from the population. The
study found out that most operators do not apply capital budgeting techniques in evaluating their
investments and those that apply use payback period. Most of the operators interviewed practice
intuitive management. According to the study, most operators favored a combination of equity
and debt capital. The major reason for use of debt was the easy to access it at a lower cost
compared to other sources.

21
Kipkorir, Namiinda and Njeje (2016) assessed the influence of investment decisions on the
financial performance of registered SACCOs in Baringo County. The objectives of the study
were to determine the influence of investment in real estate, FOSA activities, lending to
members and lending to government on the financial performance of registered SACCOs.
The study was guided by the stakeholder theory, information theory and decision making
theory. The study was based on a descriptive survey design and targeted 316 members in 73
registered SACCOs in Baringo County. Stratified sampling was used in selecting a sample size
of 177 respondents. Data was collected using questionnaires and analyzed using both
descriptive (means and standard deviation) and inferential statistics (regression analysis). The
study concludes that investment in real estate influenced 9.8% of the financial
performance of SACCOs in Baringo County while 15.3% of registered SACCOs’ financial
performance was explained by lending to members. The study also concludes that FOSA
activities influenced 16.6% of registered SACCOs’ financial performance in Baringo County
while 10.7% of SACCOs’ financial performance was explained by lending to the government.
The highest influence was explained by FOSA activities, followed by lending to members, then
lending to the government and finally investment in real estate.

Also, Gathungu, Wasike and Bor (2018) investigated on the effect of public transport SACCO
management on financial performance of matatu investors in kenya: A case of matatu SACCOs
in Kajiado North Sub-County, Kenya. The main purpose of this study was to examine the effect
of public transport SACCO management on financial performance of matatu investors in Kenya.
The specific objectives of this study were: to assess the influence of savings on financial
performance of investors in Matatu SACCOs within Kajiado North Sub-County; to determine the
role of customer care on financial performance of investors in Matatu SACCOs within Kajiado
North Sub-County; to establish the influence of discipline and professionalism on financial
performance of investors in Matatu SACCOs within Kajiado North Sub-County; and to explore
the influence of management of assets on financial performance of investors in Matatu SACCOs
within Kajiado North Sub-County. The study adopted a descriptive research design. The target
population was drawn from investors registered in the 17 SACCOs operating within the Sub-

22
County of Kajiado North comprising of 700 investors (matatu owners). This study used a
research questionnaire for data collection. Results from the study revealed that there was a
positive and significant relationship between the independent variables – savings, customer care,
discipline and professionalism and management of assets. Savings was ranked as the first and
highest significant variable predicting financial performance, followed by customer care.
Discipline and professionalism were ranked as the third significant variable predicting financial
performance while management of assets was ranked as the fourth and least significant variable
predicting financial performance.

In the study of Githaka (2017), the focus was on the financial factors affecting liquidity of
Savings and Credit Co-Operative Societies in Kirinyaga County, Kenya. Savings and Credit Co-
operative The general objective of the study was to assess the financial factors that influence
liquidity of Savings and Credit Cooperatives Societies in Kenya. A cross-sectional survey
research design was used in this study. The target population consisted of all the 60 registered
SACCOs in Kirinyaga County from which a sample size of 18 SACCOs was drawn. The study
employed stratified random sampling technique. Primary data was collected by use of self-
administered semi-structured questionnaires, while secondary data was collected from audited
financial statements of the SACCOs and regulator. The data was analyzed using descriptive
statistics tools such as percentages, mean, standard deviation, mode and variances. Inferential
statistics was done by use of Pearson’s product moment of correlation. Multiple regression
analysis was performed to assess the relationship between study variables. The F-test was used to
evaluate the significance of the obtained results. Data was presented using frequency tables,
charts and graphs. The research findings portrayed a positive relationship between liquidity
management, net cash flows, credit lending and investment in non-core business and liquidity of
SACCOs. The study concluded that SACCOs in Kirinyaga County mostly capitalized on
liquidity management and as such it affected the SACCOs’ liquidity.

Mang’ana, Rotich, Hassan and Orwa, (2017) sought to establish the influence of strategic
position analysis on performance of Matatu Savings and Credit Cooperatives in Kenya. The
specific objectives were; to establish the link between the matatu SACCO vision and

23
performance, to assess the matatu SACCO Mission and performance and to evaluate SWOT
analysis and performance of matatu SACCOs. The study espoused a mixed design approach
using quantitative cross-sectional survey including causal and descriptive research designs. The
target population was 635 registered Matatu Saccos according to (NTSA,2015). Random
sampling was adopted. A sample size of 245 was obtained for the study. Questionnaires were
utilized to collect primary data. In this study, quantitative data was coded and analyzed, while
content coding was used in coding the qualitative data. Statistical techniques such as measures of
central tendency, dispersion, symmetry and inferential statistics were used to analyze the data. In
descriptive analysis, the raw data of the indicators was analyzed and presented in frequency
tables and graphs for all the variables depending on the nature of the categorical data of the
indicator. The results of the analysis indicated that strategic position analysis had a positive
relationship with performance of Matatu SACCOs.

Yobo, (2018) examined state involvement in Ghana’s public transport delivery. It mainly
explores the rationale for the creation of the Metro Mass Transit (MMT) system as a state-
backed transit organization despite the Ghanaian Government’s chequered history in the transit
industry. The empirical basis of this paper was both primary and secondary data with inclination
toward qualitative methodologies. Findings indicate that state intervention in Ghana’s mass
transit provision have been one of addressing various types of market failures. The paper also
demonstrates how the Government was, inter alia, politically motivated to set up the MMT as a
single dominant public transit company in Ghana to enjoy state patronage. Though the paper
reveals political interference in MMT’s operations, the public transit continues to register
significant strides in alleviating transit problems encountered by both urban and rural
commuters. The paper concludes that state-led transit investment which is closely-tied with
private capital promotes efficient transit systems that are socially equitable, ecologically friendly
and economically sustainable.

Past studies (Mochoge, 2015; Morwabe and Muturi, 2019; Kipkorir, Namiinda and Njeje, 2016;
Musau, 2016; Gathungu, Wasike and Bor, 2018; Githaka, 2017 and Mang’ana, et al. 2017)
portray diverse knowledge gaps that need to be filled. The fact that the aforementioned studies
undertaken were for Saccos operating in different regions, this represent contextual knowledge

24
gap. In addition, most studies had a common objective of determining the influence diverse
factors had on the performance of Saccos, be it of matatu formation or otherwise, yet the
sampling methodology was not the same. Even the methodology of measuring the prediction
variables of performance of Sacco was dissimilar. For instance, Morwabe and Muturi (2019)
gauged investment decision using investment in FOSA investment in government securities and
investment in fixed deposit account just to mention but a few whereas Musau (2016) considered
investment decision under amount of money spend on expansion purposes, replacement decision,
renewal decision and on Research and Development (R&D) decision.

The aforementioned methodological and contextual disparities would result to diverse research
findings as it was witnessed from different researchers. This calls for further interrogation on
other perspectives of investment decision making to establish the influence it has on financial
performance of Matatu Saccos. Therefore, the current study will further focus on the extent to
which investment decision in modernization such as; the aspect of acquisition of Modern
Coaches, modification of vehicles and socially responsible investment which refers to the
strategy used by investors to consider the firms’ environmental, social, and ethical impact on
customers to predict financial performance of matatu SACCOs

2.3.3 Diversification and Financial Performance

There are various ways in which an organization can portray expansion and diversification of
business activities. However, according to many study findings, the results have brought
controversial debate amongst researchers. For example, in the study of Lomuria, Wanyama, and
Mamuli, (2019) aimed at establishing the effect of expansion strategies and financial
performance of SACCOs in Turkana County, Kenya. The study was guided by the following
specific objectives: to establish the effect of market penetration expansion strategies on financial
performance of SACCOs; to establish the effect of diversification expansion strategies on
financial performance of SACCOs; to determine the effect of market development expansion
strategies on financial performance of SACCOs and to assess the effect of product development
expansion strategies on financial performance of SACCOs in Turkana County. The study was
anchored on the Resource Based Theory and Igor Ansoff‘s Theory. The research designs of the
study were descriptive and correlational research designs. Target population was 234

25
respondents consisting of 35 SACCOs managers and 199 Secretariat drawn from the 35
SACCOs in Turkana County. Purposive and stratified sampling techniques were used. The
questionnaire was used as the data collection instruments.

Results of the aforementioned study were that: market penetration expansion strategies,
diversification expansion strategies, market development expansion strategies and product
development expansion strategies all had a positive, linear and significant (p-value<0.05) effect
with the financial performance of SACCOs whereby the predictor variable, namely; market
penetration expansion strategies had a coefficient of (B = 0.828), diversification expansion
strategies (B=0.502), market development expansion strategies (B = 0.679) and product
development expansion strategies (B = 0.472) had different degrees of effect on the financial
performance of SACCOs.

In a similar study of Ogada, Achoki and Njuguna (2016), although it did not target SACCOs, it
assessed the effect of diversification on the financial performance of merged institutions. The
study adopted a mixed methodology research design. The study population included all the 51
merged financial service institutions in Kenya. Purposive sampling was used. Primary data was
obtained using questionnaires and a secondary data collection template was also used. The
researcher used quantitative techniques in analyzing the data. Descriptive analysis for the study
included the use of means, frequencies and percentages. Inferential statistics such as correlation
analysis was also used. Panel data analysis was also applied. Further, a pre and post merger
analysis was used. The research findings portrayed different outcome for diversification had no
significant effect on financial performance of merged institutions.

The studies of Lomuria, Wanyama, and Mamuli, (2019)and Ogada, Achoki and Njuguna
(2016), had similar predictor variable, namely diversification but the end results were dissimilar
for in one case the outcome was significant positive influence on financial performance while no
significant results were gotten in the second study of Ogada, Achoki and Njuguna (2016).
In another study of Njagi and Munjuri (2017), the aim was to identify the effect of expansion
and diversification strategies on the performance of Naivas Chain Store. A case study was
applied in carrying out this study. The study was carried out at the headquarters of Naivas Chain

26
Store at Sameer Business Park in Industrial Area. Data was collected from the heads of the
various departments of the Chain and some managers within the departments through face to
face interviews. The study gathered data mainly on product and service diversification, internal
and external expansion, role of marketing and product promotion in expansion and
diversification, role of research in expansion and diversification and expansion and
diversification strategies versus performance. The data collected was analyzed using content
analysis. The results of the study indicated that the Chain engages in product and service
diversification within their branches. Expansion and diversification of products and services was
a continuous process that is usually based on a thorough research and analysis aimed at
identifying gaps in the market. The Chain had established new branches still had plans of
opening more branches in the near future. With a lot of marketing and product promotion
activities done by the Chain, the Chain was able to attract and retain customers enhancing its
sales. The efforts of the Chain to diversify and expand
its operations had, in most cases, positive effect on performance. Negative effect of expansion
and diversification are witnessed in cases of failure of new products and huge investment costs
incurred during expansion.

Mutire, Kadima and Juma (2020) investigated the effect of diversification on loan default rate in
non-deposit taking Savings and Credit Cooperative Societies, Kakamega County Kenya. The
objective of the study was to determine the effect of diversification on the loan default rate of
non-deposit taking savings and credit cooperative societies in Kakamega County. The study
adopted descriptive survey design. The study targeted 255 respondents from 46 non-deposit
taking SACCOs in Kakamega County. The study sampled 144 respondents using stratified
random sampling techniques. Primary data was collected using structured questionnaire. Validity
was achieved through expert opinions of the supervisors while reliability was achieved through
Cronbach alpha. Quantitative data was analyzed descriptively using frequencies, Mean, Standard
deviation and percentage while Pearson’s Product Moment Correlation Coefficient and Multiple
linear regression analysis with aid of SPSS version 23 to generate inferential statistics. The data
was presented in form of tables and regression models. The study established that diversification
has a negative influence on loan default rate. The study concluded that diversification influence

27
loan default rate of non-deposit taking savings and credit cooperative societies in Kakamega
County.

A study which focused on commercial banks portrayed deviating outcome. That is the study of
Ndungu and Muturi (2019) who sought to determine the effect of diversification on financial
performance of commercial banks in Kenya. The specific objectives of the study were to
determine the effect of income diversification on financial performance of commercial banks in
Kenya, to examine the effect of geographical diversification on financial performance of
commercial banks in Kenya and to examine the effect of product diversification on financial
performance of commercial banks in Kenya. Secondary data used by the study was collected for
five years period (2013-2017 on annual basis). All the commercial banks were studied. Data was
analyzed using descriptive and inferential statistics and presented in tables and figures. The study
found that income source diversification and geographical diversification had a positive effect on
the financial performance of the commercial banks while the product diversification had a
negative impact the financial performance the commercial banks. The findings from the OLS
regression analysis revealed that the diversification components studied namely product
diversification, geographical diversification and income diversification explain up to 13.3% of
the variations in return on assets (R2=0.133) and 18.7% of the variations in return on equity
(R2=0.187). The study concluded that financial performance of the commercial banks in Kenya
can be accounted for by the diversification strategies that have been implemented. It was further
concluded that increased formulation and implementation of additional diversification
strategies resulted in significant improvement in the financial performance of the commercial
banks.

In Nigeria, a study by Oyedijo (2012) interrogated on the effects of product – market

diversification strategy on corporate financial performance and growth. Using the triangulation
analytical technique involving correlation, multiple regression, ANOVA, independent
sample test and Scheffe Ad Hoc test, it was found that there is a high and positive
correlation between financial performance and related diversification strategy. Related
diversifiers had a relatively higher level of financial performance than unrelated and mixed
diversifiers. A marginal correlation was found between unrelated and mixed modes of

28
diversification and financial performance and sales growth. The regression analysis showed
that related diversification had a significant impact on performance (t = 3.380; p< 0.05)
while unrelated diversification had a negative but non-significant impact on performance and
growth. The result of the analysis of variance (ANOVA) showed that there were significant
performance differences between firms utilizing only related diversification strategies and
those utilizing only unrelated diversification strategies (F = 3.110, p <0.05). The Scheffe’s
Test further confirmed that there is a significant difference between the performance of
firms using mixed (related and unrelated) diversification strategies and the performance of firms
pursuing either of the two strategies exclusively with firms pursuing either of the two
strategies exclusively outperforming the firms that are pursuing mixed (related and unrelated)
diversification strategies. A significant difference was also found between the performance of
firms that develop through related or unrelated diversification and the performance of firms
that remained specialized, with firms that remained specialized performing better on all
parameters and growing faster in sales than those that develop through related and
unrelated diversification only. The study concludes that the financial performance and sales
growth of firms in Nigeria are significantly affected by the mode of diversification.

In different studies, expansion and diversification were treated as the dependent variable contrary
to the focus of the current study. For instance, in the study of Khanagha and Aalbers, (2018)
which investigated on the impact of external board capital, i.e. the social capital of external
directors serving in the board of a company, on its diversification strategy. It is argued that
through that network of contacts firms can overcome complexities and uncertainties in their
environment when contemplating entering new markets. Additionally, it was hypothesized that
the current performance might also motivate the choice to diversify in a sense that when it is
unsatisfactory, firms are more prone to pursue new businesses, whereas this motivation declines
as performance increases. Companies diversify with the prospect of improving profitability
through spreading risks and creating synergies. However, since the strategy entails quite some
costs, diversifiers should strive for an optimal fit with their internal capabilities which act as
mediators in the diversification-performance mechanism in order to ensure profitability. The
analysis has been done on a sample of 119 IT firms for a 10-year period. The findings indicate
that board capital is a powerful driver for diversification while the diversification-performance

29
relationship is not so straightforward. From that study it shows that there are some indications of
non-linearity and mediation. This represents a conceptual knowledge gap that need to be
considered.

Also, in the study of Mehmood, Hunjra and Chani (2019), intermediation aspect was
incorporated and a two-step dynamic panel approach was utilized to test the hypothesis thereof.
Data was collected from 520 manufacturing firms from Pakistan, India, Sri Lanka, and
Bangladesh. The study utilized panel data of 14 years from 2004–2017 to analyze the results. A
two-step dynamic panel approach was utilized to analyze the hypotheses. It was established that
product diversification and geographic diversification significantly affected the firms’ financial
performance. It was further revealed that dividend policy and capital structure had a significant
impact on the firm’s financial performance. This implies that with various aspects of
diversification and other probable variables, more empirical outcome can be arrived at an
evidence of various knowledge gaps such as conceptual and methodological views. This calls for
further investigations using other aspects of expansion and diversification to find out if
predictable influence works on financial performance of matatu SACCOs as advocated by this
study.

Odhiambo (2019) in Kenya, incorporated financial sustainability as the dependent variable

instead of the common financial performance. In his study, he investigated on the relationship
between portfolio diversification and Financial Sustainability of Deposit Taking Savings and
Credit Cooperative Societies in Kenya. The specific objectives of the study were based on
income optimization and risk management. This study applied qualitative descriptive research
design and purposive sampling design. Content analysis was used to analyze the data. The
research findings from the reviewed empirical studies related to portfolio diversification and
financial sustainability of DT Savings and credit cooperative societies indicated that
financial sustainability was influenced by income optimization and risk management.

Although from the past reviewed studies it clear that financial performance was the variable
which was being estimated by most studies, the issue of profitability level of each firm size is a
factor to consider. The study of Subramaniam and Wasiuzzaman (2019) investigated on the

30
relationship between geographical diversification (GDI) and profitability (ROA) which yielded
mixed findings across various developed countries. This study re-examined the relationship
using data of public firms listed on the main market of Bursa Malaysia for the period of 2010–
2014 using quantile regression approach. The firms were categorized into small firms and large
firms based on the firm size median value. The empirical results showed that GDI affects ROA
heterogeneously in various quantile levels of the ROA for all firms, small firms and large firms.
GDI significantly (positive relationship) influences ROA in the middle quantile region (from
quantile 0.25 to 0.75) for all firms, in the low quantile region (from quantile 0.1 to 0.5) for the
sample of small firms and in the high quantile region (from quantile 0.5 to 0.9) for the sample of
large firms.

In Vietnam, a similar study to that of Subramaniam and Wasiuzzaman (2019) was undertaken
by Tu DQ Le (2021) where by empirically examining the impact of geographical expansion and
income diversification on bank stability in Vietnam between 2006 and 2015 using
the system generalized method of moments (GMM). The findings show that in
general geographic expansion can enhance bank stability while income diversification per se
does not. The results also indicate that state-owned commercial banks could only benefit from
geographic expansion rather than from income diversification. However, foreign ownership
tends to promote bank stability when pursuing both strategies.

Shrestha (2018) looked at investors’ interest in the government securities in Nepal. Descriptive
and analytical research design was employed with a target population being all the government
securities investors. Judgmental sampling was used to choose investors and a sample size of 200
was achieved. The outcome indicated that both the poor and the rich were interested in the
government investment. A conclusion was drawn that; income is the major factor in the
government securities investment. Also Parimalakanthi & Kumar (2015) evaluated on the
investment preference and individual attitude in Coimbatore City, India. Friedman test, Garratt
ranking and factor analysis were used to analyze the primary collected data. Investment avenues
investigated were; corporate bonds, government securities, savings account, fixed deposit
account, Shares, gold and silver, chit funds, commodities, insurance policies and real estate

31
Activities. The study established that investors prefer bank deposits closely followed by
investment in Gold and silver.

The reviewed literature under diversification and financial performance and other studies not
captured in this study implies that financial performance may not necessarily be predicted by
different estimators in the same manner in all ways. It cannot be universally predicted that the
results are the same. As a result, the current study has the impetus to interrogate further whether
if diversification measured using The current study will utilize matatu SACCO loan portfolio,
investment in diverse securities, acquisition of refilling stations and insurance brokerage
agencies and parcel delivery services indicators to gauge diversification decisions. will influence
financial performance of matatu SACCOs in a significant way or otherwise.

2.3.4 Regulation Requirements and Financial Performance

The formation of the National Transport and Safety Authority (NTSA), all road transport
functions such as motor vehicle inspection, motor registration and licensing, driver testing and
licensing have been brought under one roof of NTSA. This formation has brought a turnaround
of how matatu SACCOs operate as compared to earlier times.

Past studies portray diverse results on the role of regulations on public sector performance. In the
study of Filippova and Voronina (2021), the aim was to analyze the organizational and legal
aspects of transport organizations to ensure sustainable economic development. The
development uses modern legal science and methods of scientific research to develop and
improve Russian legislation governing the provision of transport and logistics services. We used
materialistic dialectics, complex and system analysis, logical laws and rules, and modeling in our
research. In particular, we reviewed and analyzed the norms of the current Russian legislation,
their implementation by the subjects of economic activity, and the works of civil scientists in
private law and specialists in other related fields. Based on the analysis of Russian legislation
and doctrinal understanding of logistics services, the study conducted a theoretical and applied
study of the existing improvements in the legal regulation of this sphere. The logistics should be
considered on economic category and a traditional institution to ensure steady transport
development. The study proposed amendments to existing federal laws, including changes in the

32
name of certain sections of the Civil Code of the Russian Federation. To control organizations
providing transport and logistics services, measures of public administrative impact directly
affecting the sustainable development of transport are proposed.

In a study undertaken in Colombo (Sri Lanka), Faisalabad (Pakistan) and Dares Salaam
(Tanzania), of Sohail et al. (2006) the aim was to use the findings from case study research to
demonstrate the importance of an appropriate regulatory framework and effective mechanisms of
enforcement for sustainable urban transport systems in developing countries. Secondly, the paper
highlighted the critical importance of communication and co-ordination between stakeholders
(defined here as transport users, providers and regulators) if regulation is to be effective. The
views of poor and disadvantaged passenger groups—women, children, the elderly and disabled
were used in the paper to illustrate the importance of transport systems to their livelihoods, such
as work, education, health and social pursuits. The case studies suggest that in the context of the
failure of both the fully regulated public transport sector and the completely de-regulated sector
self-regulation is a potentially useful alternative.

In Kenya, Muhoro, (2021). The purpose of the study was to establish the effect of the regulatory
environment on the relationship between strategic transport integration and sustainable
mobility of Matatu Saccos in Nairobi County, Kenya The study was guided by Positivism
philosophy while descriptive research design was adopted. The target population was
177 Sacco Managers and two representatives, one from MOT and other from MVOA
respectively. The whole population of 179 respondents was used in the study hence; the
study employed the census approach. The questionnaire was pilot tested on 18 respondents
who were selected randomly. The study applied Cronbach's alpha and the results displayed a
high level of internal consistency hence infers that the research tool used in the study was
reliable. The data collection instrument was a semi-structured questionnaire, which were
dropped and picked later. A semi-structured interview guide was also used. Data was
analysed using descriptive and SPSS Version 24.

The findings indicate that there exists a statistically significant, positive effect of strategic
integration on sustainable mobility of Matatu Saccos in Nairobi County, Kenya. The R square in

33
the moderated models changed from 71.3% to 80.9% indicating 9.6% increase in variation
as a result of the regulatory environment moderating effect. Further, the increase was
statistically significant; this implies that regulatory environment does significantly moderate the
effect of strategic integration and sustainable mobility of Matatu Saccos in Nairobi
County, Kenya.
The past studies focused on portrayed an hint that regulations have a role to play. In the current
study, the focus will be the moderating role played by NTSA regulations on the relationship
between investment decisions and financial performance of matatu SACCOs with offices in
Nairobi CBD, Kenya. .

2.4 Summary of Literature and Research Gaps

Generally, the reviewed literature in this study portrays conceptual, methodological and
contextual knowledge gaps that need to be filled. It was proven that the revealed studies
classified the same variable in diverse categories such as financial performance which was used
as the dependent variable in one study as well as predictor variable in another study. Also, the
aspects of expansion, replacement, modernization diversification was gauged in different ways
by several past studies that were reviewed and the research findings varied. The methodology
used even when the main objective was to predict the financial performance also was subjective
based on the discretion of the researcher. The outcome of the study ended being dissimilar.

Contextually as far as region where the study took place or the organization studied was
concerned, the aspect was not the same hence the outcome for organizations in the developed
countries may not be compared with similar ones in the growing economies. This disparities
calls for further interventions through empirical research to determine whether significant
outcome is possible if aspect of expansion of existing business, replacement, modernization
diversification in predicting financial performance of matatu SACCOs is incorporated in another
study.

Review of literature on interlink between investment decision and financial performance resulted
to numerous knowledge gaps of conceptual, methodological, theoretical and contextual nature.

34
The presence of these gaps supports the need for the proposed study. The specific gaps are
summarized in Table 2.1.

Table 2. 1: Summary of Literature Review and Research Gaps

Author Focus of the Methodolo Findings Research Gaps to be filled
&Year study gy Gaps by the current
study
Morwabe To establish Descriptive The study found Focus was on Current study
& Muturi, effect of research out that the model investment will focus on
(2019) investment design for a containing FOSA affiliated to investment
decisions on quantitative Activities, FOSA decision and the
financial time series government activities and financial
performance of data was securities, fixed not capital performance of
DT SACCOs adopted deposit account budgeting matatu SACCOs.
in Nairobi and shares as which involves Investment
County, investment investment decision will be
Kenya. decisions had a decisions measured using
strong influence on acquisition of
changes in DT- Vehicles with
SACCOs Higher Capacity
profitability.
Gathungu, The effect of Descriptive There was a Management Investment
Wasike and public research positive and was the decision will be
Bor (2018) transport design significant independent measured using
SACCO relationship variable and Collaboration
management between the was used to with Petroleum
on financial
independent predict the Firms to
performance of
matatu variables – financial estimate the
investors in savings, performance financial
kenya: A case customer care, of SACCOs performance of
of matatu discipline and matatu
SACCOS in professionalism SACCOs
Kajiado North and management
Sub-County, of assets.
Kenya.
Yobo, Examined state Qualitativ It was revealed State The current
(2018) involvement in e that political intervention study will focus
Ghana’s public methodolo interference in was used as the on investment
transport gies MMT’s independent decision and
delivery. variable while financial
operations, the
MMT transit performance of
public transit was the matatu SACCOs
continues to dependent using descriptive
register variable. cross sectional
significant strides Aspect of research design
in alleviating financial
transit problems performance of

35
 encountered by the SACCOs
both urban and was not
rural commuters. addressed.
Mang’ana, To establish Causal and The results of the The study used The current
Rotich, the influence descriptive analysis causal research study will
Hassan and of strategic research indicated that design and did analyze data
Orwa, position designs strategic position not consider using descriptive
(2017) analysis on testing the data cross sectional
analysis had a
performance of using granger research design
positive
Matatu causality for data collected
Savings and relationship with approach is of primary
Credit performance of nature and is
Cooperatives Matatu Saccos collected at one
in Kenya. point in time
Kipkorir, To assess the Descriptive The highest Contextual gap Current study
Namiinda influence of survey influence was exists for the will focus on
& Njeje investment design explained by focus was on those matatu
(2016) decisions on FOSA activities, SACCOs in SACCOs
the financial followed by Baringo operating
performance lending to County Kenya between Nairobi
of registered members, then CBD and other
SACCOs in lending to the counties
Baringo government and
County. finally investment
in real estate.
Musau The effect of Empirical Replacement The focus of This study will
(2016) investment study decision, renewal this study was establish the
decisions on design decisions & on SACCOs in influence of
financial research and Kitui town and investment of
performance of development were not financial
SACCOs in decisions necessarily of resources on
Kitui Central positively matatu nature.
Insurance
Sub- contributed to Also the
brokerage
County. SACCO investment
performance as decision services on
measured by considered as financial
dividends while predictors were performance of
expansion Replacement matatu
decisions had a decision, SACCOs
negative renewal
contribution. On decisions & The current
the other hand, R&D. The study will also
expansion question is if test the
decision, other moderating
modernization investment effect of
decision and decisions may regulations on
research and have varied the relationship
development outcome on between
decision had a financial investment
positive performance of decisions and

36
 contribution to matatu financial
SACCO financial SACCOs performance of
performance as matatu SACCOs
measured by
surplus or deficits
while replacement
decision had a
negative effect.
Mochoge To determine Survey The study found The study used
(2015) the influence design out that most
of budgeting operators do not
techniques, apply capital
cost of capital budgeting
and operating techniques in
cost on returns evaluating their
of matatu investments and
SACCOs in those that apply
Kisii County use payback period
Muriuki, Analysing the Adopted The results showed This study The current
Muraguri factors survey that financial considered study is
and Kyalo, influencing and literacy investment concerned on
(2014), investment descriptiv significantly decision as the whether
decisions of influenced dependent investment
e research
Sacco funds in investment variable and decision
design
Kenya decision the results significantly
were estimate
significant. financial
Hence, it performance of
represents a matatu
conceptual SACCOS. It is
knowledge gap considering
investment
decision as the
independent
variable
Muriuki, To find out the Descriptiv It was established Investment The current
Muraguri effects of e research that each of the decision was study will
and Kyalo, financial design independent treated as the consider
(2014), services, variables had a dependent investment
Makiche namely: credit positive influence variable and decisions as the
and services, on the investment not financial predictor
Nyamute deposit and decisions of SMEs performance. variable while
(2016) savings in Bomet county financial
account performance of
services, and matatau
training, had SACCOs as the
on the dependent
investment variable
decisions of
SMEs in
Bomet County,

37
 Kenya.
Koech, Investigated on Explanato The results showed Investment o Current study
Koske and the influence ry that decision was is using
Cheboi of research Representativeness used as a investment
(2020) representativen design Heuristics mediating
decision
ess, heuristic significantly variable and
where by it is
behavior, predicts not purely as a
Investment SME’s financial predictor of measured
Decisions, and performance and financial using
Financial this relationship is performance. acquisition of
Performance partially mediated high carry
of Small and by Investment capacity cars
Medium decisions by the matatu
Enterprises in SACCO
Nairobi, owners/Mana
Kenya. ment

Santoso To examine Case Results showed Financial

(2019) the effect of that the asset performance
The current
study
investment structure has an was measured study will
decisions and effect on financial using ROI measure
the selection of performance and which may not financial
appropriate firm value. The apply on the performance
sources of capital structure issues of using market
funds on the affects the matatu share approach
performance of financial SACCOs for matatu
the company performance but SACCOs do
and the does not affect the not keep
consequent firm value of the
records to
impact on the company.
firm value.
warrant ROI
secondary data

Kerubo and To determine Used The findings gave The study

Mwangi, how an R-square value focused on
The current
descriptiv
(2019) investment of 0.317 meaning deposit taking study uses
e cross-
decisions that SACCOs and Socially
sectional
impact the 31.7 percent the Responsible
design
efficiency of changes in the independent Investment to
deposit taking efficiency of DT- variables were, estimate
SACCOs in SACCOs in investment in financial
Nairobi. Nairobi, Kenya real estate, performance of
can be government matatu
attributed to the securities & SACCOs and
seven selected investment in
not their
predictor variables shares which
produced
efficiency
positive and
statistically
substantial

38
 values f while
investment in
fixed deposits,
liquidity, firm
size and age
were found to
be statistically
insignificant
determiners of
efficiency.
Lomuria, To establish descriptiv Results of the The study
Wanyama, the effect of study were that: considered
The current
e and
and expansion market penetration market study is
correlation
Mamuli, strategies and expansion penetration considering the
al research
(2019) financial strategies, expansion Issuance of
designs.
performance of diversification strategies, Loans to
SACCOs in expansion diversification Members and
Turkana strategies, market expansion the extent this
County, development strategies, predictor can
Kenya. expansion market influence
strategies and development financial
product expansion
performance of
development strategies and
expansion product
matatu
strategies all had a development SACCOs
positive, linear and expansion
significant (p- strategies as
value<0.05) effect the investment
with the financial decision
performance of appropriate to
SACCOs predict
financial
performance
Mutire, To investigate Descriptiv The study The dependent
Kadima the effect of established that variable was
The current
e survey
and Juma diversification diversification has loan default study is
design
(2020) on loan default a negative rate which is focusing on the
rate in non- influence on loan different to extent to which
DT-SACCOs- default rate. financial financial
Kakamega performance performance is
County Kenya. influenced by
diversification
as the predictor
variables

Subramania Investigation Quantile It was established The focus was The current
m and on the regression that GDI on the SMEs study will
Wasiuzzam relationship approach significantly and not consider
an (2019) between (positive SACCOs investment in
geographical relationship)
parcel delivery

39
 diversification influences ROA in services in
(GDI) and the middle quantile estimating
profitability region (from financial
(ROA) quantile 0.25 to performance in
0.75) for all firms, terms of market
share which
will be gauged
using growth
rate in capital
& savings

Source: Researcher (2021).

40
 2.5 Conceptual Framework

The conceptual framework delivers a metaphorical depiction of the association between the
concepts in the study. Therefore, it represents the foundation of this study where by the
independent variable is investment decision and financial performance of matatu SACCOs with
headquarters in Nairobi CBD, Kenya is the dependent variable as indicated in Figure 2.1

INVESTMENT DECISIONS

Independent Variables dependent variable

Figure 2.1: Conceptual Framework Moderating Variable

Source: Researcher (2021).

41
 CHAPTER THREE

RESEARCH METHODOLOGY

3.1 Introduction
This chapter provides methodology to be used in this study. In particular, it outlines the research
design, target population, sample design, data collection instrument, data analysis, presentation,
and ethical considerations.

3.2 Research Design

This study will bases its investigation on descriptive survey research design. This is because all
the matatu SACCOs being investigated are located in a vast region covering the 47 counties.
This type of research design will be used since it will enable the researcher to generalize the
findings to a larger population. It guarantees breadth of information and accurate descriptive
analysis of features of a sample which can be used to make inferences about whole population
(Mugenda & Mugenda, 2011).

3.3 Target Population

The population of this research study comprise of 547 matatu SACCOs registered with NTSA
out of which a sample size will be selected. .

3.4 Sample Size and Sampling Procedure

This section describes the sample size and sampling procedures used in conducting the study

3.4.1 Sample Size

The total number of registered matatu SACCOs registered with NTSA were 547. Convenience
sampling technique was used to collect a more representative sample for the study. Hence, the
relevant observation items that enabled achievement of the research objectives were considered
and therefore firms with incomplete data were left out (Maniagi et al. 2013 and Mbuva, Mirie,
Kaijage, & Ochieng, 2017). This implies that matatu SACCOs which do not have a full set of

42
data on variables mentioned in the study will be excluded. Therefore a sample size of 220 will be
selected out of the targeted population of 547 matatu SACCOs registered under NTSA.
Table 3.1: Sample Frame
Category of matatu SACCOs No of SACCOs No of
officials-CEOs/owners,
managers or supervisors
Nairobi Area 66 66
Nairobi-to Rift valley Counties 31 31
Nairobi to Eastern Counties 23 23
Nairobi to Central Counties 49 49
Nairobi to Western Counties 16 16
Nairobi to Nyanza Counties 28 28
Nairobi to Coastal Counties 7 7
TOTAL 220 220
Source; NTSA, 2020

3.4.2 Sampling Procedure

The researcher will consider the 220 respondent from the 220 SACCOs stratified according to
the regions their vehicles ply to from the CBD.

3.5 Data Collection Instruments

Primary data will be collected using structured questionnaires. The questionnaire is divided in to
two parts, namely; part A which covers the general demographic data of the respondents and part
B will focus on the study variables incorporated in this study.

3.6 Pre-testing of Research Tools

To ascertain the validity and reliability of questionnaire, a pre-testing will be conducted.
Mugenda and Mugenda (2009), states that the size of a sample for the purpose of piloting should
be between 1% and 10% of the sample size. Similarly, Kothari (2009) and Sekaran (2006)
recommend a 1% sample size for a pilot study. The pre-testing will constitute 8 percent of the
sample size which translates in to a sample size of 17 respondents who will be picked from the
220 officials of the same matatu SACCOs.

The objective of pre-testing the data collection instrument is to evaluate particular facets of
research to establish if the chosen procedural directives are functioning as planned. In particular,
43
a pre-test will be undertaken to get clarification as well as comprehend the set questions to assess
whether the questions will yield to the expected outcome.
In view of these suggestions, this study will use 17 respondents which is 8% of the sample size.
This size will be sufficient according to the recommendations of Mugenda and Mugenda (2009).
The pre-test study respondents will be selected purposively outside the main study sample from
other matatu SACCOs with headquarters in Nairobi but will not be included in the main study.
In this case, the study will consider matatu SACCOs with headquarters in Nairobi CBD. The pre-
test questionnaires will be furnished to the respondents through their respective e-mail accounts.
The data from the pre-test study will be analyzed and used to improve the questionnaire through
a retest process to ensure internal consistency of the questionnaires is established. The following
elements will be considered in improving the questionnaire, comprehension, relevance,
interpretability and usefulness in view of the study objectives. Finally, all the aspects of
reliability will be approved.

3.6.1 Validity Test

Validity1is1the1degree1to1which the outcomes of data analysis accurately reflect the subject

under investigation (Bairagi & Munot, 2019). To1determine the validity of the questionnaires,
the study will utilize both content and face validity. Test results will be used to infer a vast
domain of objects that are similar to those on the test. The representativeness of the sample
population will be a concern for content validity. The test items' knowledge and abilities,
according to Yin (2017), should be reflective of the wider area of information and capabilities.

Expert opinion from supervisors and practitioners in the sector will be used to verify content
validity. This will foster improvement in validity of the collected data. It will also ensure the
appropriate modification and revision of instruments of research thus augmenting validity. Face
validity refers to the questionnaire being subjected to expert analysis and judgments from at least
two external experts who will extensively examine the research instrument's representativeness
at face value. The experts will evaluate each question in light of the study's objectives and how
respondents react, making any required revisions. For comparison purposes, instruments
established for other similar studies will be employed. The questionnaire has to portray face

44
validity, and the questions in the questionnaire will be assumed as a good translation of all the
study constructs by the reviewers.

3.6.2 Reliability Test

Reliability is a measure of relevance and correctness of the instruments used. The split half
method will be used to measure reliability of the instrument (Snyder, 2019). It is used to assess
how consistent/homogenous the questions are. To test reliability using the split half approach,
elements from the same construct would be split into two sets and tested separately. During
piloting, the full instrument will be given to a population that is representative of the research
area. Consultations with research professionals and supervisors will ensure that the legitimacy of
the qualitative instruments is achieved.

Only one administration of the questionnaire to respondents is required when using the split half
method. The outcomes of the administered questionnaire test will then be divided into1two
groups using an even and odd approach. For each respondent, the total scores for each half of the
scores will be determined. A Cronbach's Alpha coefficient will be calculated based on the
correlation between even and test results. The Cronbach Alpha reliability coefficient is a number
that ranges from 0 to 1. If the Cronbach Alpha reliability value is10.7 or higher, the instrument
will be considered reliable.

3.7 Data Collection Procedures

Primary data will be collected from the owners/CEOs, or managers or well-placed matatu
SACCO official such as a supervisor of all the matatu SACCOs through use of self-administered
questionnaires whereby drop and pick methodology will apply. Covid-19 precautions will be
incorporated by sanitizing the questionnaires as they are being issued and when collected back
and also use of the same questionnaire in soft copy format as the case applies. A grace period of
at most two weeks to fill the questionnaire is good enough. After that duration,, the researcher
will make a follow up for the respondents who will not have responded by that time. This will be
achieved by either sending a reminder e-mail message or make a cell phone call whichever way
is convenient to the respondent.

45
3.8 Data Analysis and Presentation
Data will first be subjected through a sequence of operations, which includes editing, coding,
classification and analysis using SPSS (Statistical Package for the Social Scientists). Analysis
will be done through descriptive statistics tools such as percentages, mean and standard
deviation. Inferential and correlation statistics will be performed. For correlation, the study will
use Pearson Product-Moment correlation analysis, which will be used to measure the strength of
relationships between the study variables where linear function will be formulated to help assess
the influence of the independent variables on the dependent variable. Inferential analysis will
entail multiple regression and hierarchical multiple regression for test of moderation using Baron
and Kenny (1986) and Aiken and West (1991) two stage model. Data will be presented using
frequency tables, charts and graphs.

3.9 Diagnostic Tests

The study variables will further be subjected to diagnostic tests to confirm some conditions that
have to be met for the sake of realizing reliable and valid research outcome. The tests have been
categorized into two namely; pre estimate tests and post estimate tests. The condition and the
corresponding tests used in the study are explained as follows;

3.9.1 Multicollinearity test

Multicollinearity is a case where by predictor variables are highly correlating to each other. To
test for multicollinearity, Variance Inflation Factor (VIF) will be used. A value of VIF= 10 is
assumed to be the critical value (Jingyu li, 2003). Also normality test will be undertaken.

3.9.2 Normality test

Normality state is a case of a variable being normally distributed (Jarque & Bera, 1987).

Normality tests will be carried out to determine whether the data provided will be normally

distributed or not. For test of compliance to normal, linear and homogeneity by the data

collected, histogram, normality and scatter plot of residuals which will be standardized against

46
predicted dependent values will be used. Hence histogram test will be utilized. This study will

rely on one approach of testing normality that is graphical method which relies on histogram.

3.9.3 Homoscedasticity test

Homoscedasticity is the uniformity of variance between the dependent-independent variable
relationship. It is a case whereby there exists uniform variance between the error term and the
relationship between dependent and independent variables. Otherwise heteroscedasticity prevails
implying that the error term has assumed irregular values across all predictor variables (Hair et
al. 2006). The extent to which this violation impacts on the relationship between the study
variables will be based on the magnitude of change. Such that the larger the change,
heteroscedasticity increases. This study will use modified Wald test.

3.10 Empirical Model

The following model will be used to test the relationship between the independent variables and
dependent variable.
Υ=β0+ β1Х1it + β2Х2it + β3Х3it + e
Where; Υ= Financial Performance
Х1it = Replacement of assets of the ith firm in time t
Х2it = Modernization of the transport facilities of the ith firm in time t
Х3it= Diversification of transport business of the ith firm in time t
βί (where = 0, 1, 2, 3) are coefficients
e = Error term

3. 11 Operationalization of the Study Variables

Operationalization of variables used in the study is the undisputable designing of a construct in a
way that its approximation is made more perfect (Sekaran, 1992). The operational definition of
the term used is on the basis of contextual environment in which the variable applies and it may
not necessarily carry the dictionary connotation. The variables in this study, namely; financial
performance, expansion of existing business, replacement and modernization and expansion and
diversification were operationalized in accordance with previous studies. Table 3.3 summarizes

47
the contextual definitions used in this study, the specific objectives anchoring the variables,
indicators, measurement scale applicable and the methodologies used to analyze data.
Table 3.3: Measurement /Operationalization of Variables
Type of Indicators Measure Research Analysis Tool
Variable ment Approach
Scale
Financial Market share Interval Qualitative Multiple Regression
Performance Analysis
Replacement o Acquisition of Interval Qualitative Multiple Regression
Cost-Effective Analysis
vehicles
o Acquisition of large
carrying capacity.
Vehicles

Modernization o Socially Interval Qualitative Multiple Regression

Responsible Analysis
Investment-
-Customer Comfort
-TV & WIFI-
Facilities
-Provision of safety
rituals eg make a
prayer before and
end of journey
Diversification oInvestment Interval Qualitative Multiple Regression
Collaborations; Analysis
-Insurance agencies
-Refilling stations
-Hotel Services
o Parcel Delivery
Services

3.12 Ethical Issues

Prior to starting the data collection process, the researcher will obtain authorization letter from
graduate school of Kenyatta University. The author will also apply for research permit from the
National Commission for Science, Technology and Innovation (NACOSTI). To ensure that the
study adheres to investigation moral values, the evidence collected from respondents will be
treated with highest discretion and the respondents’ personal details will be coded to hide his or
her identity, thus observing their privacy. Personal integrity will be observed when conducting
the research by being objective and avoiding misrepresentation of results. The respondents will

48
also be made to understand the reason for conducting the research, thus informed consent will be
observed. The respondents will be appreciated for finding time to answer the questionnaires.

49
REFERENCES
Abor, J. & Adjasi, C. K. D. (2007). Corporate Governance and the Small and Medium
Enterprises Sector: Theory and Implications. Corporate Governance, 7(2), 111–122.

Achchuthan, S. & Kajananthan, R. (2013). Corporate Governance Practices and Working Capital
Management Efficiency: Special Reference to Listed Manufacturing companies in
{SriLanka}. Information and Knowledge Management, 3(2), 216–226.

Adegbite, E., Amaeshi, K. & Nakajima, C. (2013). Multiple influences on Corporate Governance
Practice in Nigeria: Agents, Strategies and Implications. International Business Review,
5(22), 524–538.

Afrifa, Godfred and Tauringana, Venancio, (2015). Corporate Governance and Performance of
UK Listed Small and Medium Enterprises.

Aghajari, M., Mirbaksh, S., Mousavi, K. & Mohammadipour, R. (2015). Examining the Effect
of Corporate Governance Mechanisms on Working Capital Management Efficiency of
Corporations Accepted In Tehran Stock Exchange. International Journal of Review in
Life Sciences, 5(8), 63–73.

Ahmed, N., Zongjun, S., Shoaib, W., Ahmed, N., Zongjun, S., Shoaib, W., & Ehikioya, B. I.
(2013). Impact of Internal Attributes of Corporate Governance on Firm Performance:
Evidence from Pakistan. International Journal of Commerce and Management, 23(1),
38–55.
Aiken, L. S. & West, S. G. (1991). Multiple regression: Testing and interpreting interactions.
Thousand Oaks, CA: Sage.

Anderson, D. (1989). Small Industry in Developing Countries: A discussion of issues. World

Development, 10(11), 913–948.

Anderson, J.W. (1989). Corporate social responsibility. New York: Quorum Books.

Ariemba J., Evusa Z. & Musau M.A. (2016). Effect of Investment Decision on Financial
Performance of Savings and Credit Cooperatives: The Case of Kitui Central Sub-
County, Kenya. Journal of Economics and Sustainable Development 7(6), 56-64.

Bairagi, V. & Munot, M. V. (Eds.). (2019). Research methodology: A practical and scientific
approach. CRC Press.

Baron, R. M. & Kenny, D. A. (1986). The moderator-mediator variable distinction in Social

Psychological Research: Conceptual, strategic, and statistical considerations. Journal of
Personality and Social Psychology, 51(6), 1173-1182.

50
Baze, D. (2009). Common law of agency, A supplemental chapter for Oklahoma real estate
principles, B & B Publishing, Oklahoma, TX.

Bendickson, J., Muldoon, J., Liguori, E. & Davis, P. (2016). Agency theory: The times, they are
a-changing’, Management Decision 54(1), 174–193.

Bennett, K. H. and Rajlich, V. T. (2000). Software maintenance and evolution a roadmap,

Proceedings of the Conference on the Future of Software Engineering, ACM, ACM
Press, Limerick, Ireland, pp. 73-87.

Berman, K., Knight, J. & Case, J. (2006). Financial intelligence. Harvard Business
School Press–ISBN, 1591139(764).

Chepkosgey, (2015). Effect of on the job training practices on Employee Satisfaction.

International Journal of Academic Research in Business and Social Sciences, 5(10), 34-
49.
Cooper, Lauren A., and Jill Weber. (2020). Does Benefit Corporation Status Matter to Investors?
An Exploratory Study of Investor Perceptions and Decisions. Business & Society.

Czerwonka, Leszek. 2015. Behavioral Aspects of Investment Decisions of Enterprises

(Behawioralne Aspekty Decyzji Inwestycyjnych Przedsi˛ebiorstw). Gda ´nsk: Wyd.
Uniwersytetu Gda ´nskiego.

Daugaard, Dan. (2020). Emerging new themes in environmental, social and governance
investing: A systematic literature review. Accounting & Finance 60: 1501–30.

Donaldson,L.& Preston,L.E. (1995). The Stakeholder Theory of Corporation: Concepts,

Evidence and Implications. Academy of Management Review 20(1), 65-91.

Easterbrook, F. H. (1984). Two agency-cost explanations of dividends, The American Economic

Review, 74(4), 650-659.
Economic Review,62,772-795.

Eisenhardt, M.K. (1989). Agency theory: An assessment and review’, The Academy of
Management Review 14(1), 57–74.

Elkington, J. (1997). Cannibals with forks: the triple bottom line of 21st Century business.
Oxford: Capstone.

Elkington, J. B. (1997). Cannibals With Forks: The Triple Bottom Line of 21st Century
Business. Oxford: Capstone Publishing.

Esokomi, E., & Mutua, M. (2018). Determinants of financial performance among savings and
credit cooperative societies in Kakamega county Kenya; International Journal of
Finance and Accounting, 3(1), 1- 19.

51
Filippova, T. A., and Voronina, S.V (2021). Organizational and Legal Aspects of Transport
Logistics as a Factor of Sustainable Development. IOP Conf. Series: Earth and
Environmental Science 670.

Freeman, R.E. (1984). Strategic Management: A stakeholder Approach. Boston, MA: Pitman.

Hadi, W. (2019). Analysis of the effect of net profit margin, return on assets and return on equity
on stock price (Case Study on Consumption Industrial Sector Companies Listed in
Indonesian Sharia Stock Index at Indonesia Stock Exchange in 2016). The Management
Journal of Binaniaga, 3(2), 81-92.

Hair, J. F. William, C. B, Barry, J. B. & Anderson, R. (2006). Multivariate analysis. Pearson

publishers.

Harjito, A., & Martono. (2013). Manajemen Keuangan (Editi Ke-2). Yogyakarta: Ekonisia,
Kampus Fakultas Ekonomi, Universitas Islam Indonesia.

Hart , S., & Milstein, M. (2003). Creating Sustainable Value. Academy of Management
Executive, 17(2) 56-67.

James, C. & John M (2010). Financial Management; 13th Edition. New Delhi: Phi Learning
Private Limited, India.

Jensen, M. C. & Meckling, W. H.(1976). Theory of the firm: Managerial behavior, agency
costs and ownership structure. Journal of Financial Economics, 3(4), 305-360.

Jensen, M. (1986). Agency cost free cash flow, corporate finance and takeovers, American
Economic Review, 2(76), 323-329.

Jensen, M.C & Meckling, W.H. (1976). Theory of the firm: Managerial behavior, agency costs
and ownership structure. Journal of Financial Economics, 3(4): 305-360.

Jepkorir, S., Muturi, W. M. & Ndegwa, J. (2019): Financial leverage and financial distress in
savings and credit cooperative organizations in Kenya; Journal of Management Research
and Reviews, 2(7), 11-64.

Kaplan, R. S. & Norton, D. P. (2001). Transforming balance score card from performance
measurement to strategic management: Part 1. Accounting Horizons, 87-104.

Keasey, K., Thompson, S. & Wright, M. (1997). Introduction: the Corporate Governance
Problem - Competing Diagnosis and Solutions. In K. Keasey, S. Thompson, & M. Wright
(Eds.), Corporate Governance: Economic, Management, and Financial Issues, 1 – 17.

Kemuma, M. C. (2014). Effect of investment decision on the performance of firms listed in the
Nairobi Securities Exchange, Unpublished MBA Project of the University of Nairobi.

52
Kiaritha, H. W. (2015). Determinants of the financial performance of savings and credit co-
operatives in the banking sector in Kenya (Doctoral dissertation).

Kimani, M. W. (2018). Relationship Between Credit Risk Management Techniques and Loan
Performance of Sasra Regulated Deposit Taking Saccos in Nairobi County (Doctoral
dissertation, University of Nairobi).
Kiragu, D. N. (2014). The Effect of SACCO Societies Regulatory Authority’s Regulations on
Financial Performance of SACCOs in Nairobi County. Nairobi: University of Nairobi.

Klopp J. & Mitullah, W. (2015). Politics, policy and paratransit: A view from
Nairobi, in Behrens R, McCormick D and Mfinanga D (eds), Paratransit in African
cities: Operations, regulation and reform, Earthscan Routledge, Oxford.

Kothari, C. R. (2009). Research Methodology. Methods and techniques, 2nd ed.). New Delhi:
New Age International publishers.

KUSCCO. (2009). SACCO Star Magazine. 1(54), 9-13. Nairobi, Kenya.

Mahmood, S. (2008). Corporate governance and business ethics for SMEs in developing
countries: Challenges and way forward”. In The Fourth ISBEE World Congress 15–
18 July 2008, Cape Town, South Africa.“Global Fairness–Local Integrity.

Maina, J. N., Kinyariro, D. K. & Muturi, H. M. (2016). Influence of Credit Risk Management
Practices on Loan Delinquency in Savings and Credit Cooperative Societies in Meru
County, Kenya. International Journal of Economics, Commerce and Management.
United Kingdom, 4(2), 763-773.

Mallin, C.A. & Michelon, G. (2011). Board reputation attributes and corporate social
performance: an empirical investigation of the US Best Corporate Citizens, Accounting
and Business Research, 41(2), 119-144.

Mallin, C.A. & Michelon, G. (2011). Board reputation attributes and corporate social
performance: An empirical investigation of the US best corporate citizens. Accounting
and Business Research, 4(1), 119-144.

Mang¡¯unyi, E.E. (2011). Ownership Structure and Corporate Governance andIts Effects on
Performance: A Case of Selected Banks in Kenya," International Journal of Business
Administration, International Journal of Business Administration, Sciedu Press, 2(3), 2-
18.

Mashavira, N. (2021). The perceived impact of agency control on the performance of

Zimbabwean small-to-medium enterprises. Southern African Journal of
Entrepreneurship and Small Business Management 13(1), 23-46.

Mazikana, A.T. (2019). Corporate governance and financial performance in SMEs: A case of the
Kapenta Industry in Kariba, viewed 22 October 2020.

53
Mbuva, G. K., Mirie, M. Kaijage, E. & Ochieng D.E. (2017). Financial Performance and
Dividend Policy. European Scientific Journal, 13(28), 138-154.

McCormick D, Orero R, Behrens R and Ommeh M, (2015). Savings and credit cooperative
organisations as operational arrangements for paratransit management: Case
studies of inter-city public transport SACCOs in Kenya, Report commissioned by
Development Workshop – Angola.

McGee, R. W. (2008). Corporate Governance in Developing Economies: Country Studies of

Africa, Asia and Latin America. Business and Economics.

McKay, G. (2019). Optimal asset replacement model: based on life cycle costing and business
plan requirements Master thesis, Central Queensland University, Rockhampton.

McKay, G., Sharma, S. & Uddin, M. G. (2020). Development of an Optimal Asset Replacement
Model Based on Life Cycle Costing and Business Plan Requirements

Mehmood, R., Hunjra, A. I. & Chani, M. I. (2019). The Impact of Corporate Diversification and
Financial Structure on Firm Performance: Evidence from South Asian Countries. Journal
of Risk and Financial Management, 12(49), 1-17.

Monks, R.A.G., Minow, N. (2004). Corporate Governance. Oxford and Maiden, MA: Blackwell
Publishers.

Mugenda, M., & Mugenda, G. A. (2011). Research Methods; Quantitative and Qualitative
Approaches. Nairobi: Laba Graphics Services.

Mugenda, O. M. & Mugenda, A. G. (2009). Research methods: Quantitative and Qualitative

approaches. Nairobi: ACTS.

Mugo, D. M., Muathe, S., & Waithaka, S. T. (2019). Performance Analysis of Debit Card
Services on Deposit Taking SACCOs’ Financial Performance: A Case of Kenya.

Muhammad, M., Ukairo, M.l and Buhari, M. (2019). Corporate Governance and Performance of
Small And Medium-Sized Enterprises: A Catalyst for Entrepreneurship Growth and
Sustainability in Nigeria. The 1st International Conference on Business, Management and
Information Systems 2019.

Muhoro, P.W. (2021). Effect of the Regulatory Environment on the Relationship

between Strategic Transport Integration And Sustainable Mobility Of Matatu Saccos
In Nairobi County, Kenya, International Journal of Business Strategies, 2(6), 14-25.

54
Mukesh, B.A & Dinesh, B.A (2014). Investors or Speculators-Behavior of Stock
Market Players: International Journal of Engineering Sciences. Vol 4, PP 1-12.

Mulili, B. M., & Wong, P. (2011). Corporate Governance Practices in Developing Countries:
The Case for Kenya. International Journal of Business Administration, 2(1), 14–27.

Munene, E. N., Ndambiri, J. M., & Wanjohi, S. M. (2019): Effect of Unsecured Commercial
Bank Loans on Financial Performance of Savings and Credit Co-Operative Societies in
Kenya; International Journal of Accounting, Finance and Risk Management, 4(1), 1-14.

Muñoz-Porcar, A., Alonso-Nuez, M., Flores-García, M. and Duret-Solanas, D. (2015). The

renewal of assets using a tool to aid decision making. Management Decision, 53(7),
pp.1412-1429.

Mursalim, Hendragunawan, Alamzah, N., & Sanusi, A. (2015). Financial Decision, Innovation,
Profitability and Company Value: Study on Manufacturing Company Listed in
Indonesian Stock Exchange. Information Management and Business Review, 7(2), 72–78.

Musau M.A & Ariemba, J., Evusa, Z (2016). Effect of Investment Decision on Financial
Performance of Savings and Credit Cooperatives: The Case of Kitui Central Sub-County.
Journal of Economics and Sustainable Development, 7(16), 56-64.

Neely, A. (1999). The performance measurement revolution: why now and what next?
International Journal of Operations & Production Management, University of
Cambridge, UK: MCB University Press, 19(2), 205-228.

Nizar, D., Ihab Q., Araby M, and Abdelbaset, Q. ( 2020). Corporate Governance in the Small
and Medium Enterprises (SMEs) as Performance Enhancer. Conference Paper.

Njagi W.P. (2014). The Relationship between Corporate Governance Practices and the Financial
Performance of Top 100 Small and Medium Enterprises in Kenya. (Unpublished MBA-
University of Nairobi).

Ototo, G. (2017). Chapter 10 Report on the SACCO Movement in Kenya up to 2017.

Pandey M (2008). Financial Management. New Delhi: Vikas Publishing House Pvt Ltd, India.

Parimalakanthi, K., & Kumar, M. A. (2015): A Study on Investment Preference and behaviour of
Individual Investors in Coimbatore City; Bonfring International Journal of Industrial
Engineering and Management Science, 5(4), 170.

Phung, Duc Nam, and Anil V. Mishra. 2016. Corporation Diversification and Firm Performance:
Evidence from Vietnamese Listed Firms. Australian Economic Papers 55: 386–408.

55
Radebe, M.S., 2017, ‘The benefits of good corporate governance to small and medium
enterprises (Smes) in South Africa: A view on top 20 and bottom 20 JSE listed
companies’, Problems and Perspectives in Management 15(4), 271–279.

Rashid, A., & Saeed, M. (2017). Firms’ investment decisions–explaining the role of uncertainty.
Journal of Economic Studies, 12(10), 23-34.

SACCO Societies Act. (2008). Kenya Gazette Supplement No. 98 (Acts No. 14). Nairobi: The
Government Printer.

SASRA. (2013). Deposit-Taking SACCOs Licensed by the SACCO Societies Regulatory

Authority. Retrieved from http://www.sasra.go.ke/ downloads/Licensed_Saccos_
2013.pdf

Schulze, W.S., Michael, H., Lubatkin, M.H., Dino, R.N. & Buchholtz, A.K., 2001, ‘Agency
relationships in family firms: Theory and evidence’, Organization Science 12(2), 99–116.

Sekaran, U. (1992). Research methods for business. A skill building approach. (2 nd Ed). United
States of America: John Wiley & Sons, Inc.

Sekaran, U. (2006). Research methods for business: A skill building approach. John Wiley &
Sons.

Shitanda Douglas and Bosire Philip and Kiveu Mary Nafula, 2018. “Factors affecting the
performance of matatu saccos in kenya: a case study of matatu saccos in Nairobi central
business district”, International Journal of Development Research, 8,(2), 18907-18913.

Shrestha, P. (2018). A Study on Investor's Attitude towards Government Securities in Nepal;

Journal of Business and Social Sciences, 2(1), 67-78.

Snyder, H. (2019). Literature review as a research methodology: An overview and guidelines.

Journal of Business Research, 104, 333-339.

Somavia,J.(2002).ILORecommendationNo193onCooperativesat
www.ica.coop/europe/ra2002/speech

Svetlana V. S. & Marina A. P, (2018). Modernization of the Company's Fixed Assets: Critical
Factors that Affect the Capital Budgeting Decisions. Journal of Reviews on Global
Economics, 7(10), 804-811.

Tsagem, M.M., Aripin, N., Ishak, R. (2014), Impact of working capital management and
corporate governance on the profitability of small and medium-sized entities in
Nigeria: A proposed model. International Journal of Science Commerce and
Humanities, 2(5), 53-65.

56
Ujunwa, A. (2012). Board characteristics and the financial performance of Nigerian quoted
firms. Corporate Governance, 12( 5), 656-674.

Ujunwa, A., Okoyeuzu, C., & Nwakoby, I. (2012). Corporate Board Diversity and Firm
Performance: Evidence from Nigeria. Review of International Comparative Management
Revista de Management Comparat International, 13(4), 605–620.

WOCCU (World Council of Credit Unions). (2013). Member Statistics. Retrieved from
http://www.woccu.org/about/intlcusystem.

World Bank. (1999). Non governmental Organizations in Bank-Supported Projects. Washington

D.C., WB.

Xue, Y., Guan, H., Corey, J., Wei, H. & Yan, H. (2017). Quantifying a Financially Sustainable
Strategy of Public Transport: Private Capital Investment Considering Passenger Value.

Yahya, F., Ali, S.A. & Ghazali, Z. (2016). The relevance of agency conflicts in small and
medium enterprises. International Journal of Advanced and Applied Sciences 3(7), 41–
45.

Yobo, E. (2018). State Intervention In Public Transportation In Ghana. Journal of

Transportation and Logistics 3(1), 2018.

Yokinawa H (1980). The Q Theory of Investment. The American Economic Review. Vol 70; pp
739-743

Zakkies, M.W. (2016). Capital budgeting practices and performance of matatu business in Kisii
County, Kenya. Unpublished project of University of Nairobi.

57
 APPENDICES

Appendix I: Cover Letter

Dear respondent,

I am a masters student, at Kenyatta University and as part of my course requirement I am

currently conducting a study on “INVESTMENT DECISIONS AND FINANCIAL
PERFORMANCE OF MATATU SACCOs WITH OFFICES IN NAIROBI CBD, KENYA”.

. You are requested to kindly participate in the survey. The information you will provide is for
academic purpose only and shall be treated with utmost confidentiality.

Thank you in advance for your co-operation and active participation to this academic effort.

Yours Faithfully,

Joram Kasyoki Mutua

58
Appendix II: Questionnaire for Management officials of Matatu SACCOs with Offices in
Nairobi CBD, Kenya

This questionnaire is meant to gather information on the topic: “Investment Decisions and
Financial Performance of Matatu SACCOs with Headquarters in Nairobi CBD, Kenya”

Instructions: Kindly tick in the appropriate box.

SECTION A: DEMOGRAPHIC DATA

1. What is your Sex?

a). Male [ ]

b). Female [ ]

2. Tick (√ ) in either of the Boxes provided to indicate your position in the matatu SACCO

i) Matatu Owner…………………………………….

ii) CEO/Director or Deputy…………………………

iii). Manager/Supervisor……………………………

iv). Other SACCO official Position-Specify……….

3. How long have you worked in the matatu SACCO as an official?

a). Between 1-5 years: [ ]

b). 5--10: [ ]

c). 11-20: [ ]

d). Above 20: [ ]

4. What is your level of education?

a). No formal education [ ]

b). Primary level [ ]

c). Secondary level [ ]

d). College/university level [ ]

59
SECTION B: Financial Performance of Matatu SACCOs

1. Please indicate your opinion or otherwise with the following statements relating to
Financial Performance of Matatu SACCOs. Use the scale: 1=Strongly Agree (SA),
2=Agree (A), 3=Neutral (N), 4=Disagree (d), and 5=Strongly Disagree (SD).

SA A N D SD
Statements
[1] [2] [3] [4] [5]

Members of our Matatu SACCO have

been actively saving with the SACCO
for the last 5years
Our SACCO savings and credit
accounts have been growing at a high
rate

New members have continuously

been joining the SACCO

Current capital base is more than

when the SACCO was small

Capital base is equivalent to our

SACCO total assets

For the last five years, SACCO capital

base has been having an upward
growth

SECTION C: Replacement

1. Please indicate your opinion or otherwise with the following statements relating to Expansion
of Existing Business. Use the scale: 1=Strongly Agree (SA), 2=Agree (A), 3=Neutral (N),
4=Disagree (d), and 5=Strongly Disagree (SD).

SA A N D SD
Statements
[1] [2] [3] [4] [5]

For the last five years, members have

been acquiring vehicles with a bigger
capacity as compared to what they

60
 had before

The higher carrying capacity vehicles

has proven to be more economical as
compared to the less carrying capacity
ones-eg 19 vs 14 seaters

As management, we advocate for the

larger capacity seaters due to cost
efficiency reasons

Vehicles with new engine model

consume less fuel as compared to old
models

There is high tendency of members of

our SACCO to upgrade new vehicle
models instead of second hand

SECTION D: Modernization

1. Please indicate your opinion or otherwise with the following statements relating to
Modernization. Use the scale: 1=Strongly Agree (SA), 2=Agree (A), 3=Neutral (N),
4=Disagree (d), and 5=Strongly Disagree (SD).

SA A N D SD
Statements
[1] [2] [3] [4] [5]

Most of the Members of the SACCO

have their vehicles fitted extra
facilities to make customer more
comfortable

Most SACCO ticketing and payments

can be done online without visiting
the SACCO office

Some of our SACCO vehicles have

modified seats to cater for customer
confort-eg 11 seaters/ 1st, 2nd and
Economy classes

Management arrange for some

61
 religious rituals to be performed at
some point as customer care-eg
praying before the journey starts/ends

SECTION E: Diversification

2. Please indicate your opinion or otherwise with the following statements relating to
Diversification. Use the scale: 1=Strongly Agree (SA), 2=Agree (A), 3=Neutral (N),
4=Disagree (d), and 5=Strongly Disagree (SD).

SA A N D SD
Statements
[1] [2] [3] [4] [5]

Both the management and the

members of our SACCO are in
agreement to go collaboration/linkage
way for the sake of our customers

In addition to transport services, we

have our own insurance agency

Our SACCO owns/collaborates with

refilling stations to curb price
fluctuations

We consider our customer luxury by

organizing for subsidized hotel
services
In addition to transport services, we
also provide parcel delivery services

62
SECTION F: NTSA Regulations

3. Please indicate your opinion or otherwise with the following statements relating to NTSA
Regulations. Use the scale: 1=Strongly Agree (SA), 2=Agree (A), 3=Neutral (N),
4=Disagree (d), and 5=Strongly Disagree (SD).

SA A N D SD
Statements
[1] [2] [3] [4] [5]

NTSA rules and regulations have

generally created better coordination
of transport activities in all matatu
SACCOs

NTSA regulations have eliminated

unnecessary practices such as
overloading which has reduced our
vehicle maintenance cost

NTSA regulations has resulted to

minimal cases of punitive offences
which take away our daily income in
form of fines

NTSA regulations have reduced the

number of accidents on the road
which cost us a lot when
compensating the damaged party or
property
NTSA regulations are necessary for it
has instilled discipline to our workers
hence increased customer satisfacton

63
Appendix III
1) 12C TRANSPORT SACCO LTD
2) 2B TRAVELLERS SACCO LTD
3) 2K-NN SAVINGS AND CREDIT CO-OPERATIVE SOCIETY LIMITED
4) 2KR ROUTE 105 MULTIPURPOSE COOPERATIVE SOCIETY LIMITED
5) 2KW SAVINGS AND CREDIT CO-OPERATIVE SOCIETY LTD
6) 2NK SACCO SOCIETY LIMITED
7) 2TS SAVINGS AND CREDIT COOPERATIVE SOCIETY LIMITED
8) 3KEN SAVINGS AND CREDIT CO-OPERATIVE SOCIETY LIMITED
9) 8B SACCO SAVINGS AND CREDIT COOPERATIVE SOCIETY LTD
10) AJAWAAB TRANS SAVINGS AND CREDIT CO-OPERATIVE SOCIETY LIMITED
11) ALDANA TRAVELLERS SACCO
12) BABA DOGO 25 TRAVELLERS SACCO
13) BAHAMA SITA TRAVELLERS SAVINGS AND CREDIT CO-OPERATIVE SOCIETY LTD
14) BLUELINE SAFARIS SHUTTLE
15) BOMET TRAVELLERS SACCO
16) BUNGOMA TRANSPORTERS SACCO LTD
17) BURETI EXPRESS SACCO LTD
18) BURUBURU 58 TRAVELLERS SAVINGS AND CREDIT CO-OPERATIVE SOCIETY LIMITED CBET
SACCO
19) CENTRAL LINE SAVINGS & CREDIT CO-OPERATIVE SOCIETY LIMITED
20) CHANIA KIBWEZI TRAVELLERS SACCO LTD
21) CITY TRAVELLERS SAVINGS AND CREDIT COOPERATIVE SOCIETY LIMITED
22) CLASSIC PELICAN SACCO LIMITED
23) CLASSIC SHUTTLE SAVINGS AND CREDIT CO-OPERATIVE SOCIETY LIMITED
24) COMFORT SAFARIS SACCO
25) COMLINES SACCO LIMITED
26) DABUMATO COMMUTER SERVICE SAVINGS & CREDIT CO-OPERATIVE SOCIETY LTD
27) DAKIKA MATATU OWNERS SACCO
28) DAKIKA MATATU OWNERS SACCO
29) DIX-HULT MATATU OWNER SACCO
30) EASTLEIGH ROUTE SACCO
31) ECOSA TRAVELLERS SACCO
32) EGESA SHUTTLE SACCO
33) ELDO-MET SAVINGS AND CREDIT CO-OPERATIVE SOCIETY LIMITED
34) ELDORET CROSS ROAD INVESTMENT CO-OPERATIVE SOCIETY LIMITED
35) ELDORET SHUTTLE SAVINGS AND CREDIT CO-OPERATIVE SOCIETY LIMITED
36) ELDORET VICTORY SAVINGS AND CREDIT CO-OPERATIVE SOCIETY LIMITED
37) ELEVENTH HOUR TRANSPORT SACCO
38) EMBASSAVA COOPERATIVE SAVINGS AND CREDIT SOCIETY LTD
39) EMUKI COOPERATIVE SAVINGS AND CREDIT SOCIETY LIMITED
40) FAMWENA ANKUMA SACCO LTD
41) FARASI TRAVELLERS SACCO LTD
42) FASTRACK UNITED AND CREDIT COOPERATIVE SOCIETY
43) FIG KOMBA
44) FINLAY LINE COOP SACCO LTD
45) FORWARD TRAVELLERS SACCO LTD
46) FOUR NT COOPERATIVE SAVING AND CREDIT SOCIETY LTD
47) FRANCO RIRUMA TRAVELLERS SACCO LTD
48) GANAKI MULTI PURPOSE COOP SOCIETY

64
49) GATANGA TRAVELLERS
50) SAVINGS AND CREDIT CO-OPERATIVE SOCIETY LTD
51) GATUNDU TRAVELLERS SACCO
52) GINYALI COOPERATIVE SAVINGS & CREDIT SOCIETY LTD
53) GITHIGA TRAVELLERS SACCO
54) GITHURAI 45 SACCO
55) GREAT NYANZA TRAVELLERS SACCO
56) HURUMA 46 SAVINGS AND CREDIT CO-OP SOCIETY LTD
57) INAGI TRAVELLERS SACCO LTD
58) INANA SEVEN SEATERS SHUTTLE SAVINGS AND CREDIT CO-OPERATIVE SOCIETY LIMITED
59) INDIMA (NJE) SACCO
60) INTER COUNTIES TRAVELLERS SACCO
61) JONSAGA FLATS SACCO
62) K64SAVING AND CREDIT CO-OPERATIVE SOCIETY LIMITED
63) KAKA TRAVELLERS SACCO LIMITED
64) KAM TRANSPORTERS SACCO LTD
65) KAMANA SAVINGS AND CREDIT COOPERATIVE SOCIETY LTD
66) KAMUKI TRAVELLERS SAVINGS AND CREDIT COOPERATIVE SOCIETY LIMITED
67) KAMUNA SACCO LIMITED
68) KANGEMI MATATU OWNERS SACCO
69) KANI TRANSPORT SACCO SAVINGS AND CREDIT SOCIETY LIMITED
70) KARIOBANGI MATATU OWNERS SAVINGS AND CREDIT CO-OPERATIVE SOCIETY LIMITED
71) KARIOBANGI MATATU OWNERS SAVINGS AND CREDIT CO-OPERATIVE SOCIETY LIMITED
72) KASBOWA SAVINGS AND CREDIT COOPERATIVE SOCIETY LIMITED
73) KAWANGWARE MATATU SAVINGS AND CREDIT CO-OPERATIVE SOCIETY LIMITED
74) KETNNO SAVINGS &CREDIT COOPERATIVE SOCIETY LTD
75) KIAMBU MARAFIKI SACCO LTD
76) KIBERA MATATU OWNERS COOPERATIVE SAVINGS AND CREDIT SOCIETY LIMITED
77) KIGUMO TRAVELLERS CO-OPERATIVE SAVINGS & CREDIT SOCIETY LIMITED
78) KILGORIS KLASSIC SACCO LTD
79) KILIMAMBOGO TRAVELLERS SACCO
80) KILLETON COMMUTERS SERVICES SAVINGS AND CREDIT COOPERATIVE LTD
81) KIMMA SAVINGS AND CREDIT CO-OPERATIVE SOCIETY LIMITED
82) KINATHI SAVINGS AND CREDIT CO-OPERATIVE SOCIETY LIMITED
83) KINATWA CO-OPERATIVE SACCO SOCIETY LIMITED
84) KINYANA TRAVELLERS SACCO
85) KIRAGI TRAVELLERS SAVINGS AND CREDIT CO-OPERATIVE SOCIETY LIMITED
86) KITENGELA MINI BUSSACCO(KIMISA)
87) KIU INVESTMENT SACCO
88) KIWANJA LINE SAVINGS AND CREDIT CO-OPERATIVE SOCIETY LIMITED
89) KNRT SAVINGS & CREDIT CO-OPERATIVE SOCIETY LIMITED
90) KOLLEN TRAVELLERS SACCO LTD.
91) KUKENA SACCO SOCIETY LIMITED
92) LAKENYA TRANSPORT SACCO LTD
93) LANKANA SACCO SOCIETY LIMITED
94) LATEMA 22 TRAVELLERS SACCO
95) LIKANA ROUTE 114/115 MATATU CO-OPERATIVE SOCIETY LTD
96) LINA SAVINGS AND CREDIT CO-OPERATIVE SOCIETY LIMITED
97) LINGANA SAVINGS AND CREDIT CO-OPERATIVE SOCIETY LIMITED
98) LIRA LINE SACCO SOCIETY LTD

65
99) LOPHA MULTIPURPOSE CO-OPERATIVE SOCIETY
100) MACHAKOS PUBLIC TRANSPORTERS SACCO SOCIETY LTD
101) MADIWA MATATU OWNERS SACCO
102) MAKATA SACCO
103) MAKUENI TRANSPORTERS SACCO
104) MAKUYU TRAVELLERS SACOO LTD
105) MAMIKA SACCO LIMITED
106) MANATWA SACCO
107) MANGA NISSAN TEAM SACCO LTD
108) MANGU LINE SACCO
109) MANMO SACCO
110) MARIMBA TRAVELLERS SACCO
111) MASABA LINE SERVICES SACCO LTD
112) MATAARA TRAVELLERS SACCO
113) MATWA SAVINGS AND CREDIT SOCIETY LIMITED
114) MERU NISSAN OPERATORS COOPERATIVE SAVINGS AND CREDIT SOCIETY LIMITED
115) MIZIZI INVESTMENT TEAM SACCO LTD
116) MNGN SACCO LTD
117) MNK SACCO SOCIETY LTD
118) MOLO CLASSIC SACCO SOCIETY LTD
119) MOLO GROUP SERVICES SAVINGS AND CREDIT CO-OPERATIVE SOCIETY LIMITED
120) MTN SACCO LTD
121) MUIGANA SACCO
122) MWAKI TRAVELLERS SACCO SOCIETY LTD
123) MWIKI PSV SACCO
124) NABOKA TRAVELLERS SACCO
125) NAEKANA ROUTE 134 CO-OPERATIVE SAVINGS $ CREDIT SOCIETY LTD
126) NAGIRU 145 SACCO
127) NAIROBI FRIENDS TRAVELLERS SOCIETY
128) NAIROBI-WESTERN-CLASSIC SACCO
129) NAIVASHA SOUTH LAKE CO-OPERATIVE SAVING AND CREDIT SOCIETY LTD
130) NAIVASHA TRAVELLERS SAVINGS AND CREDIT CO-OPERATIVE SOCIETY LIMITED
131) NAKAM SACCO SOCIETY LIMITED
132) NAKAMATA SAVINGS AND CREDIT COOPERATIVE SOCIETY LTD
133) NAKASKI TRANSORT SAVINGS CREDIT SACCO LTD
134) NAKATHI TRAVELLERS SACCO LIMITED
135) NAKIMU CLASSIC TRAVELLERS SACCO
136) NAKINDUKA MATATU SACCO
137) NAKINI COOPERATIVE SAVINGS AND CREDIT SOCIETY LIMITED
138) NAKISA SACCO SOCIETY LTD
139) NAKONN SACCO LTD
140) NAKURU MAU NAROK & NAROK LINE SERVICES (INOORO) LIMITED
141) NAKURU PRECIOUS SERVICES/VICTORIA TRANSPORT SAVINGS AND CREDIT CO-OPERATIVE
SOCIETY LIMITED)
142) NAKWE TRAVELLERS SACCO SOCIETY LTD
143) NAMASCCO SAVINGS AND CREDIT CO-OPERATIVE SOCIETY LIMITED
144) NAMOKI TRAVELLERS SAVING AND CREDIT CO-OPERATIVE SOCIETY LTD
145) NAMUGA COOPERATIVE SAVINGS AND CREDIT SOCIETY LIMITED
146) NAMUKIKA COOPERATIVE SAVINGS AND CREDIT SOCIETY LIMITED
147) NANAISIO SHUTTLE SAVINGS AND CREDIT COOPERATIVE SOCIETY LIMITED
148) NANGKIS MATATU SACCO

66
149) NARUGI DEVELOPMENT SACCO LTD
150) NARUNYA SACCO SOCIETY
151) NASAMKI SACCO
152) NAWAKU SACCO
153) NAWASUKU SACCO
154) NAZIGI SACCO
155) NENO SACCO SOCIETY LTD
156) NEW CLASSIC TRAVELLERS SACCO LIMITED
157) NEWLOT TRAVELLERS SACCO LTD
158) NG'ARUA LINE COOPERATIVE SAVINGS AND CREDIT SOCIETY
159) NGOKANA SACCO SOCIETY LIMITED
160) NGONG TRAVELLERS SACCO
161) NGUMO-LINE SAVINGS AND CREDIT CO-OPERATIVE SOCIETY LIMITED
162) NGUSO TRAVELLERS SACCO
163) NJOROLINE OPERATORS SAVINGS AND CREDIT CO-OPERATIVE SOCIETY LIMITED
164) NKIKAN SACCO SOCIETY LIMITED
165) NORTHERN E. COACH TRAVELLERS SACCO LTD
166) NUNGUNI EXPRESS TRAVELLERS SACCO
167) NJOROLINE OPERATORS SAVINGS AND CREDIT CO-OPERATIVE SOCIETY LIMITED
168) NKIKAN SACCO SOCIETY LIMITED
169) NORTHERN E. COACH TRAVELLERS SACCO LTD
170) NUNGUNI EXPRESS TRAVELLERS SACCO
171) OBAMANA TRAVELLERS SACCO
172) OLENGURUONE NISSAN SAVINGS AND CREDIT COOPERATIVE SOCIETY LIMITED
173) OL'KALOU LINER SACCO SOCIETY LIMITED
174) OROKISE SACCO LTD
175) OUTER CIRCLE SACCO
176) PAKIN ALICIA SACCO SOCIETY LTD
177) QUE SERVICES SAVINGS AND CREDIT CO-OPERATIVE SOCIETY LTD
178) REMBO SHUTTLE SAVINGS AND CREDIT SACCO LTD
179) ROG TRAVELLERS SAVINGS
180) AND CREDIT COOPERATIVE SOCIETY LTD
181) RONGAILINE SACCO
182) RONGAO SAVING AND CREDIT COOPERATIVE SOCIETY LIMITED
183) RONGO PUBLIC TRANSPORT SAVINGS AND CREDIT CO-OPERATIVE SOCIETY LIMITED
184) RUKAGINA 44 SACCO
185) RUKINE TRAVELLERS SAVINGS AND CREDIT CO-OPERATVE SOCIETY LIMITED
186) RUNA TRAVELLERS SACCO
187) RUNKA SERVICES COOPERATIVE SAVINGS AND CREDIT SOCIETY LTD
188) SABATIA SAFARIS SACCO
189) SATIMA SACCO SOCIETY LTD
190) SEMA STAGE MINIBUS OWNER SACCO
191) SEMAKA COOPERATIVE SAVINGS AND CREDIT SOCIETY LIMITED
192) SERIAN SAVINGS AND CREDIT CO-OPERATIVE SOCIETY LTD
193) SIRARE LINE SACCO LTD
194) SIXTY FOUR TRAVELLERS SAVINGS AND CREDIT CO-OPERATIVE SOCIETY LIMITED
195) SMART HIGHWAYS SACCO LTD
196) SNOWBALL SACCO SOCIETY LTD
197) SOLAI LINE SAVINGS AND CREDIT COOP SOCIETY LIMITED
198) SOUTH B MATATU OWNERS SACCO SOCIETY LTD

67
199) SOUTH B TRAVELLERS SAVINGS AND CREDITCO-OPERATIVE SOCIETY LTD
200) SOUTH RIFT TRANSPORT SAVING AND CREDIT CO-OPERATIVE SOCIETY LIMITED
201) ST. MARYS TRANSPORT SACCO SOCIETY
202) SUPER HIGHWAY 45 SACCO SOCIETY LTD
203) SUPER PREMIUM SAVINGS AND CREDIT COO-PERATIVE SOCIETY LTD
204) TAWALA UTAWALA SACCO
205) THIKA FALLS SACCO LTD
206) THIKA TRAVELLERS CHOICE SACCO
207) THOMAT SAVINGS AND CREDIT COPPERATIVE SOCIETY LIMITED
208) TRANSAFARIS SAVINGS AND CREDIT CO-OPERATIVE SOCIETY LTD
209) TRANSWEST TRAVELLERS CO-OPERATIVE SAVINGS AND CREDIT SOCIETY LIMITED
210) TUJIJENGE COUNTRY BUS SACCO
211) TUNYAI MATIRI TRANSPORT RURAL SAVINGS AND CREDIT COOPERATIVE SOCIETY LIMITED
212) TWENTY MINIBUS SAVINGS AND CREDIT CO-OPERATIVE SOCIETY LIMITED
213) TWINS CROSSROADS TRAVELLERS SAVINGS AND CREDIT CO-OPERATIVE SOCIETY
214) UMOINNER SACCO LTD
215) UMOJA INNERCORE TENA MATATU OWNERS SAVINGS AND CREDIT CO-OPERATIVE SOCIETY
LTD
216) UMOWA SACCO
217) UNGWANA SUCCESS SACCO
218) WASAFIRI TRAVELLERS SACCOLTD
219) WEST MADARAKA ROUTE 14 COOPERATIVE SACCO.
220) Z TRAVELLERS SACCO

Source: National Transport & Safety, 2020

68
Appendix IV: Work Plan
DATE / ACTIVITIES July Oct Nov Jan
2021- 2021- 2021 to 2022
Sept Nov Dec -Mar
2021 2021 2021 2022

Coming up with a research topic

Writing chapter one

Writing chapter two and three

Proposal defense

Data Collection

Data Analysis and Report Writing

Handing over of final report

69
Appendix V: Budget Estimate
Item Cost in Kshs

Stationery 5,000

Journals 5,000

Printing 3,500

Miscellaneous Expenses 5,000

Traveling 15,000

Total 33,500

70