Influence of Financial Management Practices on the Performance of Housing Cooperative Societies in Kenya.

This study investigated the influence of financial management practices on the performance of housing cooperative societies in Kenya, amidst a growing demand for affordable housing and challenges in the sector. The research was conducted among 115 housing cooperatives registered under the National Union for Housing Cooperatives (NACHU) in Nairobi County. A cross-sectional research design was employed, utilizing structured questionnaires to gather primary data from general and financial managers. The study's theoretical framework was anchored in the Resource-Based View, Pecking Order Theory, Cash Management Theory, and Modern Portfolio Theory, to comprehensively assess the impact of financial management practices on organizational performance. Key findings from the study revealed that budgeting management, cash management, financial risk management, and dividend policy management all significantly influence the performance of housing cooperative societies. Budgeting practices, including budgetary control and effective communication, were found to be essential for detecting deviations from plans and ensuring fiscal discipline. Cash management practices, such as maintaining proper records and conducting due diligence before investments, also played a crucial role in influencing the societies' performance. Furthermore, the study highlighted the importance of financial risk management strategies in enhancing resilience during economic downturns and improving resource allocation. Dividend management practices were identified as a key factor in attracting and retaining members, with preferences for stable and immediate dividends influencing financial decisions.The study concluded that effective financial management practices are indispensable for the sustainability and growth of housing cooperative societies. Recommendations included the institutionalization of comprehensive budgeting processes, adoption of robust cash management practices, mainstreaming of financial risk management, and implementation of balanced dividend policies. Further research is suggested to explore additional variables influencing cooperative performance and to examine the role of digital financial tools in enhancing financial management practices