ABSTRACT 

Savings and Credit Co-operatives Societies (SACCOs) are in the business of safeguarding money and other valuables for their members besides providing loans and offering investment financial services. Credit creation is the main income generating activity for the SACCOs. But this activity involves huge risks to both the lender and the borrower. The researcher carried out this study to establish the effect of risk management strategies on performance of SACCO’s in Nakuru County, Kenya. The specific objectives of the study were; to identify the effect of risk avoidance, risk reduction, risk transfer and risk retention on performance of SACCO’s in Nakuru County, Kenya. This study will be significant to SACCO’s as their top management who are in charge with the responsibility of managing risk will get valuable information in this field and ways of enhancing performance of SACCOs. This study adopted descriptive survey research design. The target population of this study was 165 credit, finance and management staff working with Saccos in Nakuru County. To draw the 63 study respondents from the targeted population, simple random sampling method was utilized. The data collection instrument used in the study was questionnaires. The statistical tool for the analysis was Statistical Package for the Social Sciences (SPSS) version 25. Presentation was done in form of tables. The study findings revealed that, there is a positive correlation among the dependent and the independent variables in this study. It was concluded that, risk management by the Saccos in Nakuru is accompanied by detailed plans concerning risks and thus enhances Saccos performance. Risk reduction has a positive effect on performance of Saccos and that most of the Saccos in Nakuru County conducts regular inspections to enable them reduce occurrence of risks in their saccos. Most of the Saccos prefers risk transfer which is done by reinsuring their operations with the insurance companies to enable them avoid risks. The researcher further concluded that, risk management strategies by the SACCOs has led to high SACCOs profitability. The study recommends that risk function profiling should be maintained, and that Sacco's should emphasize risk management and risk control measures. Saccos performance would probably enhance by observing and applying risk control and management methods. Monthly reports should be produced, assessed and interpreted to provide a clear image of the Sacco's status. Further study should consider the use of both qualitative and quantitative methods that can be used to evaluate borrowers.