Research Article
Predictive Power of Network Development Capability on Firm Performance: Empirical Evidence from Deposit-Taking Savings and Credit Cooperative Societies in Kenya
Veronica Wanjiru Ruo*
,
Godfrey Muigai Kinyua
Issue:
Volume 12, Issue 5, October 2026
Pages:
86-99
Received:
21 August 2026
Accepted:
7 September 2026
Published:
27 September 2026
DOI:
10.11648/j.ebm.20261205.11
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Abstract: The Savings and Credit Cooperative Societies (SACCOs) sector in Kenya plays a critical role in promoting financial inclusion through the provision of affordable savings and credit services. However, despite growth in assets and membership, deposit-taking SACCOs (DT-SACCOs) continue to face challenges, including slow loan processing, increasing customer complaints, operational inefficiencies, and declining stakeholder confidence. These challenges highlight the need to strengthen organizational capabilities, particularly network development capability. This study examined the predictive power of network development capability on the performance of DT-SACCOs in Nairobi City County, Kenya. The study was anchored on Relational View Theory, Dynamic Capabilities Theory, and the Balanced Scorecard Model. An explanatory research design was adopted. The target population comprised 475 senior- and middle-level management employees from 41 DT-SACCOs, from which a sample of 215 respondents was selected using proportionate stratified sampling. Data were collected using semi-structured questionnaires comprising both closed- and open-ended questions. Quantitative data were analyzed using descriptive and inferential statistics with the aid of SPSS, while qualitative responses were analyzed thematically. The findings revealed that network development capability had a positive and statistically significant predictive effect on firm performance (β = 0.462, p = 0.001). The qualitative findings further indicated that strategic partnerships, trust building, strategic alignment, communication, and network governance were important aspects of network development capability, although challenges remained in implementing collaborative projects, optimizing relationships, and integrating communication systems. The study concludes that strengthening network development capability can enhance the performance of DT-SACCOs. It therefore recommends that SACCOs prioritize trust building, formalize partnership agreements, strengthen communication and coordination mechanisms, and align networking activities with strategic objectives to improve operational efficiency, customer satisfaction, stakeholder confidence, and overall organizational performance.
Abstract: The Savings and Credit Cooperative Societies (SACCOs) sector in Kenya plays a critical role in promoting financial inclusion through the provision of affordable savings and credit services. However, despite growth in assets and membership, deposit-taking SACCOs (DT-SACCOs) continue to face challenges, including slow loan processing, increasing cust...
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