Cost Leadership Strategy on Performance of SACCOs in Kisii County, Kenya

The study explored how Deposit-taking Savings and Credit Cooperative Organizations (SACCOs) contribute to financial inclusion and economic empowerment in Kenya, with a focus on Kisii County. It acknowledged the growing competition SACCOs face from commercial banks, microfinance institutions, and digital financial platforms, which poses a threat to their sustainability and performance. To address this challenge, the study aimed to evaluate the effects of cost leadership performance of SACCOs in Kisii County. The study was anchored on Porter’s Generic Competitive Strategies. A survey research design was used, targeting 141 respondents including SACCO managers, board members, and regulators. Data were collected through questionnaires, validated for reliability and analysed using SPSS. The study provided actionable insights for improving SACCO competitiveness and strengthening their role in Kenya’s financial ecosystem. The findings indicate that cost leadership strategy is a highly influential factor in driving performance, demonstrating its strong predictive effect. The study concludes that cost leadership strategy is a significant positive predictor of performance among deposit taking SACCOs. The study further recommends that while cost leadership strategies did not show meaningful effect on SACCOs, re-engineering operational processes through digitization and automation would reduce transaction and service delivery costs hence, performance. Further, the SACCOs would optimize branch networks by embracing alternative channels such as agency banking, mobile banking, and online platforms and shift focus to low-cost digital marketing strategies like social media, SMS marketing, and referral programs that target high-conversion segments.