ABSTRACT

The financial sector in Kenya is very competitive due to the many players in the market. The competition for customers is not only from the banks, deposit taking microfinance institutions but also amongst the SACCOs themselves. Like any other business organizations SACCOs need to create value for their clients in order to gain competitive advantage and thus ensure survival and profitability. Certain types of resources owned and controlled by SACCO have the potential and promise to generate competitive advantage, which eventually leads to superior organizational performance. The purpose of this study was to investigate the effects of organization resources on competitive advantage of SACCOs in Nyeri County. The objectives of the study were to determine the effect of ICT resources on the competitive advantage, investigate the effect of financial resources on the competitive advantage, examine the effect of human resources on the competitive advantage and determine the effect of physical resources on the competitive advantage. The study used the descriptive survey research design. This study targeted all deposit taking SACCOs in Nyeri County. SACCO managers and departmental heads were the respondents in the study. A census of all the 14 SACCOs was conducted. Purposive sampling was used to select individuals to participate in the study. From each SACCO the manager, heads of accounts, marketing, finance and credit and ICT departments were selected to give the study a sample of 56 respondents. The study used the questionnaires to collect data. Descriptive statistics (frequencies and percentages) were used to organize data. Regression analysis was used to establish relationships between variables. Statistical Package for Social Sciences version 21 for Windows was used to enter, store and analyze data. The results from the data analysis were presented using tables of frequencies and percentage. The study found that majority of SACCOs had ICT policy. All SACCOs’ employees were computer literate, computers were connected to the internet and a network for sharing resources was present. All the SACCOs in the study had a capital base of over 250 million Kenya shillings. Access to bank loans for SACCOs was high. Credit policy is followed when the customers are being advanced credit. All SACCOs in the study had between 101 and 250 employees. Most of the SACCO employees were diploma holders. Majority of respondents agreed that their SACCO had buildings, cars and land for offices that were used to serve customers more efficiently. Other physical resources owned by SACCOs included Auto teller machines (ATMs) and computer hardware. ICT resources (p=0.001), Financial resources (p=0.000) and human resources (p=0.000) were statistically significant at 95% confidence level.The R2 value of 0.842 indicated that 84.2% of competitive advantage of SACCOs can be explained by organizational resources. The findings showed that financial resources (β =0.727) were the most important resource held by a SACCO. The study concluded that organization resources positively affect competitive advantage of SACCOs. The study concludes that the most important resources for a SACCO are financial resources followed by human resources and ICT resources in that order. The study recommended that SACCOs should embrace ICT innovation further and adopt such concepts as point of sale and widen their ATM points. It was also recommended that on top of hiring high qualified employees, SACCOs should seek to enhance their employee quality by introducing training programs using various approaches to increase employee output.