| dc.description.abstract | The concept of portfolio diversification has taken a global center stage in the process of
determining the financial performance of investment companies and continues to be an
increasingly important aspect of investment decisions in the world today. The environment in
which SACCOs in Kenya operate is ever changing and continually presents opportunities and
challenges which has seen a number of making losses. This study sought to establish the effect of
non-core business investments on the financial performance of deposit-taking SACCOs in
Kenya. The study specifically sought to determine the influence of investment in FOSA
products, investment in treasury bills, investment in shares, real estate investment, and fixed
deposits investment on financial performance of deposit-taking SACCOs in Kenya. The study
was guided by agency theory, resource-based theory, pecking order theory, the neoclassical
theory of investment, and the Q theory of investment. This study adopted a descriptive research
design. The target population of this study was 174-deposit-taking SACCOs in Kenya.
Secondary data collected was analyzed using correlation analysis, descriptive statistics and panel
data regression analysis. The study established that investment in FOSA products, treasury bills,
shares, real estate and fixed deposits have a significant effect on financial performance of
deposit-taking SACCOs in Kenya. The study concluded that investing in stocks provides
attractive long-term returns. Investment in real estate allows an organization to benefit from tax
advantages and gain cash flow because the monthly income generated by rental properties can
offset investors' expenses and return money to the organization. FOSA products improve
financial performance by mobilizing savings. They accomplish this through various accounts that
can be opened based on the SACCO members’ qualifications. The best investment portfolio for
maximizing returns is a fixed deposit and when compared to a regular savings account, financial
institutions offer competitive interest rates on fixed deposits, which may help compensate for the
annual inflation rate. Treasury bills are a safe, short-term investment that provides an
organization with returns after a relatively short period of time. The study recommended that
investors who decide to invest in stocks should consider the long term, which means a 3-5 year
time frame to maximize their investment. Deposit-taking SACCOs can invest in rental properties
to generate regular income and capital appreciation while maximizing capital through leverage.
Deposit taking SACCOs in Kenya should work on saving mobilization techniques for FOSA
products in order to provide more information to current and potential members. They should
develop and put in place revenue optimization systems. Deposit taking SACCOs should invest in
short-term fixed deposits, and as short- to medium-term interest rates rise, the SACCO may
begin to increase the duration of the Fixed Deposit to match. Contrast bank fixed deposits with
corporate fixed deposits. The deposit taking SACCOs can buy short-term Treasury bills on
Treasury Direct, the U.S. government's portal for buying U.S. Treasuries. Short-term Treasury
bills can also be bought and sold through a bank or broker. | en_US |
