RETAINED EARNINGS AND FINANCIAL PERFORMANCE OF SAVINGS AND CREDIT COOPERATIVE SOCIETIES IN GARISSA COUNTY, KENYA

The main objective of the study was to establish the influence of retained earnings on financial performance of SACCOs in Garissa County, Kenya. The study was anchored on Pecking Order Theory. The study used a descriptive design and targeted ten registered SACCOs active in Garissa County. The units of observation comprised all board members for each SACCO. A purposive sampling approach was employed in selecting 90 participants. Primary data was gathered through a 4-point-Likert-scale questionnaire. Secondary data was collected through a panel data collection sheet. The collected data was analysed using both descriptive statistics and inferential statistics. The statistics were generated using the Statistical Package for Social Scientist V24 program. A multiple regression analysis that linked dependent and independent variables was used. The results were presented using tables and figures. The study established existence of a moderately high relationship between retained earnings and financial performance of SACCOs. The study further established that retained earnings positively and significantly affected financial performance of SACCOs in Garissa County. The study concluded that retained earnings positively and significantly affect financial performance of SACCOs. The study recommends SACCOs to improve management of retained earnings and re-invest retained earnings prudently to support investments and liquidity purposes.