Risk assessment and financial performance.

Abstract

This study analyzed the effect of risk assessment and financial performance in saccos. It was conducted under three objectives which sought to; client identification, client monitoring and evaluation and loan processing appraisal, A case study was used for both quantitative and qualitative analysis on a sample of 80 respondents. The sample was selected using simple random and purposive sampling techniques. Data was obtained by use of questionnaires. Data was analyzed qualitatively and quantitatively. Quantitative data was analyzed using the Statistical Package for Social Scientists 16.0 (SPSS) program. Qualitative data was interpreted by composing explanations and substantiating them using the respondents open responses. The study found out that there was a relationship between client identification and financial performance, client monitoring and evaluation and financial performance, relationship between loan processing appraisal and financial performance.It also found out there was a good relationship between risk assessment and fiancial performance of saccos. Therefore, the study concluded that risk assessemntt has big or effect on the financial performance of Saccos. Though risk assessment has an influence on the fiancial performance of Saccos. Similarly,monitoring and evaluation has an effect on the financial performance of Saccos. It was thus recommended basing on the findings and critical literature; risk assessement of Saccos should focus on monitoring the performance of their businesses by understanding their profitability, liquidity and non performing loans, leaders of local governments should train Saccos owners on how to manage their credits in order to attain desired performance and growth in business.