Abstract:
The purpose of this research was to examine liquidity management effect on the financial sustainability of DTS in
Mount Kenya Region. The study was guided by four objectives; cash management, risk management, asset
liability management and management competency on the financial sustainability of SACCOs in Kenya. A census
survey of all the 52 SACCOs was carried out. SACCOs within the Mount Kenya region were chosen because it was
the home of 61% of the total number of SACCOs in Kenya (according to the Ministry of Industrialization and
Enterprise Development, 2012. The respondents consisted of one accountant in every SACCOs as they had
information about liquidity of the SACCOs. Descriptive survey design was adopted as it provided a way to
interpret and comprehend liquidity management and financial sustainability of DTS. Primary and secondary data
were used in the analysis. Primary data on liquidity management was gathered through structured
questionnaires while secondary data was gathered from financial statements. The study achieved a response
rate of 88%. In order to generate descriptive and inferential statistics, data analysis was conducted using
Statistical Package for Social Sciences (SPSS). The study findings revealed that management competency has a
positive and significant effect on financial sustainability of DTS. The study revealed the management had enough
training to review the quality and level of information it received in order to make informed decisions and to
ensure that a governance audit was conducted. Cash management, risk management and asset liability
management had positive but insignificant effect on financial sustainability of DTS. In addition, member’s
contributions were considered crucial to the successful implementation of effective cash management. Finally,
without a guiding policy on asset-liability it would be hard for SACCOs to obtain optimal balance in asset liability
and financial sustainability. SASRA role needs to be enhanced through introduction of better policy and increase
the monitoring role since the sector played a critical role in achieving the country’s vision 2030 and improving the
country’s economic growth.
