Effect of Customer Satisfaction on the Profitability of the Sacco Sector in Kenya. A Case of Thamani Sacco Society Limited Tharaka Nithi County

Abstract

SACCOs are on the forefront to offer financial services to their members, with the liberalization of financial industry in Kenya, this has brought in more financial institutions providing accessible cheap loans. As a result of this, financial institutions including SACCOs are competing to attract and serve the same customers. The study sought to establish the effect of customer satisfaction on the profitability of Thamani SACCO in Tharaka Nithi County. The accessible population of the study are 45 selected employees of Thamani SACCO drawn from all the 5 branches in the County. Descriptive research design was adopted to conduct this study. Data collection was by means of a structured questionnaire utilizing both closed and open-ended questions. Qualitative data was analysed via the coding of themes and concepts from which generalization was conducted. Quantitate data was analysed using descriptive statistics (frequency distribution table) Inferential statistics used included ANOVA techniques and correlation analysis to establish the relationship between research variables. The questionnaire was pre-tested to establish the reliability and viability of the questionnaire instrument. The study findings revealed a strong and substantial correlation between Sacco profitability and Customer satisfaction indicators (r=0.554, p=0.000) and that customer Satisfaction and Sacco Profitability were positively and significantly related (β =0.137, p=0.001), The study recommended that the Sacco sector in Tharaka Nithi County can use customer satisfaction as a strategic action to enhance Sacco profitability and counter competitive pressure in the industry, the study further recommended for a different study looking at the different Customer satisfaction indicators affecting Sacco profitability in Kenya.