Factors Influencing Uptake Of Loan Products From Savings And Credit Cooperative Societies In Kiangai Township, Kirinyaga County, Kenya
Majority of the Kenyan rural population prefers to seek for loans from rural Savings and Credit Cooperative Societies (SACCOs) although other financial intermediaries offering the same product at competitive pricing exists, simply because SACCOs’ objectives is to offer access to cheap credit. However, uptake of SACCO loan products in rural areas of Kenya has been low. SACCOs in rural areas are unable to meet the growing demand for loans and yet there are potential borrowers within the SACCOS. Although credit is an important instrument that can enable SACCO members overcome their liquidity constrains, loan uptake in the rural areas is relatively low. If this situation is not addressed urgently, it may mark the insolvency and dissolution of many SACCOs in Rural areas which may devastate the economy of the country. Considering there is need therefore, to understand the factors which influence the uptake of these Sacco loan products by the people of Kiangai Township in Kirinyaga County. The uptake of SACCO loan products may be attributable to; diversity of loan products, characteristics of the loan products, turn-around time, and product awareness. Studies that have been conducted on uptake of SACCO loan products provide scanty information addressing; diversity of loan products, characteristics of the loan products, turn-around time, and product awareness as factors affecting uptake of SACCO loan products in Kiangai Township and hence the rural areas of Kenya.It against this prevailing situation that this study was conducted based on the objectives; to establish the Influences of diversity of loan products on uptake of SACCO loan products in Kiangai Township in Kirinyaga County, Kenya; to find out the influence of characteristics of the loan products on uptake of SACCO loan products in Kiangai Township in Kirinyaga County, Kenya; to find out the influence of turn-around time on uptake of SACCO loan products in Kiangai Township in Kirinyaga County, Kenya.; and to establish the influence of product awareness on uptake of SACCO loan products in Kiangai Township of Kirinyaga County, Kenya. The study adopted descriptive design, wherethe target population was the 1848 active members of SACCO in Kiangai Township. The study obtained a sample population of 10% (i.e. 186 respondents), which was proportionately distributed among the SACCOS in the area. The study used Purposive sampling, where the members who visited their SACCO office were the ones selected as respondents. The study used a structured questionnaire, which was first tested for reliability and validity. The study collected the data, which was analysed using descriptive statistics with assistance of Statistical Package for Social Science (SPSS) version 17.0. The study found that loan product uptake in the SACCOs at Kiangai is moderate; diversity of loan products moderately influences the loan product uptake; the characteristics of the loan products moderately influence the loan uptake. The study father established that the influence of turn-around time on the loan product uptake is moderate; and product awareness highly influences the loan product uptake.The study recommends that; the SACCO should conduct intensive education on loan products to their members; characteristics of the loan products they are offering should have significant features and noticeable; they should review their loan policy to ensure that there are prescribed turn-around times for each loan product, which are followed; and should create awareness campaigns to its members on the loan product status.