Determinants of Leverage of Savings and Credit Co-Operatives in Kenya: An Empirical Approach

Abstract

This aim of this paper is to empirically investigate the determinants of leverage of Savings and Credit Co-operative Societies (Saccos). The study sample included 40 Sacco) registered by Sacco Society Regulatory Authority (SASRA) extended from the period 2010 to 2012. For the data analysis, regression model was employed; the explanatory variables comprised of firm size, growth rate, liquidity profitability and tangibility, whereas the explained variable was the leverage ratio. The results show that for Saccos; there were statistical significant relationships. The results from the study revealed that firm size has significant relationship with leverage at 99% confidence level, whereas liquidity and tangibility have significant relationship with leverage at 95% confidence level.