Lending decision, SACCO size and liquidity of farmers based deposit-taking SACCOs in Kenya

Kenyan farmers' Deposit-taking Savings and Credit Co- operatives (DT-SACCOs) have seen a drop in credit provision, from 9.6 % in 2022 to 5.2 % in 2023. Additionally, 52 % of these SACCOs have been declared illiquid due to imprudent lending practices. This has led to the closure or license revocation of 33 % of farmers-based DT-SACCOs. To address this issue, the study aimed to assess the moderating effect of SACCO size on the relationship between lending decisions and liquidity of farmers-based DT-SACCOs. The study employed an explanatory research design and utilized self- administered questionnaires. The study findings indicate that SACCO size significantly moderates the relationship between lending decisions and liquidity of farmers-based DT-SACCOs. As a recommendation, SACCOs should consider their size when making lending decisions, allowing larger SACCOs to manage more risk in loans to farmers, while smaller SACCOs may need to exercise more caution.