Influence of Credit Management on Financial Performance of Dairy Marketing Cooperatives in Kenya

Abstract

Agriculture development is the most critical sector for most Sub-Sahara African countries owing to its significance in food security and employment creation. Dairy cooperative societies are central to sustainable development as they are mainly intended to empower the communities especially in rural areas where agriculture is the main stay. According to United Nations estimates, the cooperative movement has brought 800 million people together globally. Dairy farmers have relied more heavily upon dairy cooperative societies to market their milk than have farmers of any other commodity. However, these cooperative societies are faced with various challenges especially after liberation and most cooperative societies in Kenya are under performing as compared to other cooperative societies in similar regions. However, most of the populations in the major production regions live below a dollar a day. This study sought to determine the influence of credit management on financial performance of Dairy cooperatives in Kisii, Nyamira, Bomet and Kericho Counties, Kenya. The study design is descriptive panel research design. Secondary data was used for analysis. The target population was four dairy marketing cooperatives with a total population of one thousand two hundred and forty five (1,245) dairy farmers registered as at December, 2018 by the Commissioner of cooperatives in Kenya in Kisii, Nyamira, Bomet and Kericho counties which also formed the study target units. Census sampling was used to select sample of the population. Secondary data over the ten yearperiod covering 2009-2018 was obtained. Data was collected using secondary data collection sheet and analyzed using multiple panel regression models. Limitations faced during data collection included high illiteracy levels amongst cooperative members. This was controlled by taking the officials through the facets of credit management to have them understand the concepts under enquiry. The study findings showed that credit management had significant influence on return on investment, a measure of financial performance of dairy marketing cooperatives in Kenya and tests for significance also showed that the influence was statistically significant. The study therefore recommends that all dairy marketing cooperative officials and members be trained on credit management aspects