Predictive Power of Network Development Capability on Firm Performance: Empirical Evidence from Deposit-Taking Savings and Credit Cooperative Societies in Kenya

Veronica Wanjiru Ruo; Godfrey Muigai Kinyua

doi:doi:10.11648/j.ebm.20261205.11

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Predictive Power of Network Development Capability on Firm Performance: Empirical Evidence from Deposit-Taking Savings and Credit Cooperative Societies in Kenya

Veronica Wanjiru Ruo^*

, Godfrey Muigai Kinyua

Published in European Business & Management (Volume 12, Issue 5)

Received: 21 August 2026 Accepted: 7 September 2026 Published: 27 September 2026

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Abstract

The Savings and Credit Cooperative Societies (SACCOs) sector in Kenya plays a critical role in promoting financial inclusion through the provision of affordable savings and credit services. However, despite growth in assets and membership, deposit-taking SACCOs (DT-SACCOs) continue to face challenges, including slow loan processing, increasing customer complaints, operational inefficiencies, and declining stakeholder confidence. These challenges highlight the need to strengthen organizational capabilities, particularly network development capability. This study examined the predictive power of network development capability on the performance of DT-SACCOs in Nairobi City County, Kenya. The study was anchored on Relational View Theory, Dynamic Capabilities Theory, and the Balanced Scorecard Model. An explanatory research design was adopted. The target population comprised 475 senior- and middle-level management employees from 41 DT-SACCOs, from which a sample of 215 respondents was selected using proportionate stratified sampling. Data were collected using semi-structured questionnaires comprising both closed- and open-ended questions. Quantitative data were analyzed using descriptive and inferential statistics with the aid of SPSS, while qualitative responses were analyzed thematically. The findings revealed that network development capability had a positive and statistically significant predictive effect on firm performance (β = 0.462, p = 0.001). The qualitative findings further indicated that strategic partnerships, trust building, strategic alignment, communication, and network governance were important aspects of network development capability, although challenges remained in implementing collaborative projects, optimizing relationships, and integrating communication systems. The study concludes that strengthening network development capability can enhance the performance of DT-SACCOs. It therefore recommends that SACCOs prioritize trust building, formalize partnership agreements, strengthen communication and coordination mechanisms, and align networking activities with strategic objectives to improve operational efficiency, customer satisfaction, stakeholder confidence, and overall organizational performance.

Published in	European Business & Management (Volume 12, Issue 5)
DOI	10.11648/j.ebm.20261205.11
Page(s)	86-99
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2026. Published by Science Publishing Group

Keywords

Network Development, Organization Performance, Deposit Taking Savings and Credit Cooperative Society

References

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Ruo, V. W., Kinyua, G. M. (2026). Predictive Power of Network Development Capability on Firm Performance: Empirical Evidence from Deposit-Taking Savings and Credit Cooperative Societies in Kenya. European Business & Management, 12(5), 86-99. https://doi.org/10.11648/j.ebm.20261205.11

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Ruo, V. W.; Kinyua, G. M. Predictive Power of Network Development Capability on Firm Performance: Empirical Evidence from Deposit-Taking Savings and Credit Cooperative Societies in Kenya. Eur. Bus. Manag. 2026, 12(5), 86-99. doi: 10.11648/j.ebm.20261205.11

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Ruo VW, Kinyua GM. Predictive Power of Network Development Capability on Firm Performance: Empirical Evidence from Deposit-Taking Savings and Credit Cooperative Societies in Kenya. Eur Bus Manag. 2026;12(5):86-99. doi: 10.11648/j.ebm.20261205.11

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@article{10.11648/j.ebm.20261205.11,
  author = {Veronica Wanjiru Ruo and Godfrey Muigai Kinyua},
  title = {Predictive Power of Network Development Capability on Firm Performance: Empirical Evidence from Deposit-Taking Savings and Credit Cooperative Societies in Kenya},
  journal = {European Business & Management},
  volume = {12},
  number = {5},
  pages = {86-99},
  doi = {10.11648/j.ebm.20261205.11},
  url = {https://doi.org/10.11648/j.ebm.20261205.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ebm.20261205.11},
  abstract = {The Savings and Credit Cooperative Societies (SACCOs) sector in Kenya plays a critical role in promoting financial inclusion through the provision of affordable savings and credit services. However, despite growth in assets and membership, deposit-taking SACCOs (DT-SACCOs) continue to face challenges, including slow loan processing, increasing customer complaints, operational inefficiencies, and declining stakeholder confidence. These challenges highlight the need to strengthen organizational capabilities, particularly network development capability. This study examined the predictive power of network development capability on the performance of DT-SACCOs in Nairobi City County, Kenya. The study was anchored on Relational View Theory, Dynamic Capabilities Theory, and the Balanced Scorecard Model. An explanatory research design was adopted. The target population comprised 475 senior- and middle-level management employees from 41 DT-SACCOs, from which a sample of 215 respondents was selected using proportionate stratified sampling. Data were collected using semi-structured questionnaires comprising both closed- and open-ended questions. Quantitative data were analyzed using descriptive and inferential statistics with the aid of SPSS, while qualitative responses were analyzed thematically. The findings revealed that network development capability had a positive and statistically significant predictive effect on firm performance (β = 0.462, p = 0.001). The qualitative findings further indicated that strategic partnerships, trust building, strategic alignment, communication, and network governance were important aspects of network development capability, although challenges remained in implementing collaborative projects, optimizing relationships, and integrating communication systems. The study concludes that strengthening network development capability can enhance the performance of DT-SACCOs. It therefore recommends that SACCOs prioritize trust building, formalize partnership agreements, strengthen communication and coordination mechanisms, and align networking activities with strategic objectives to improve operational efficiency, customer satisfaction, stakeholder confidence, and overall organizational performance.},
 year = {2026}
}

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TY  - JOUR
T1  - Predictive Power of Network Development Capability on Firm Performance: Empirical Evidence from Deposit-Taking Savings and Credit Cooperative Societies in Kenya
AU  - Veronica Wanjiru Ruo
AU  - Godfrey Muigai Kinyua
Y1  - 2026/09/27
PY  - 2026
N1  - https://doi.org/10.11648/j.ebm.20261205.11
DO  - 10.11648/j.ebm.20261205.11
T2  - European Business & Management
JF  - European Business & Management
JO  - European Business & Management
SP  - 86
EP  - 99
PB  - Science Publishing Group
SN  - 2575-5811
UR  - https://doi.org/10.11648/j.ebm.20261205.11
AB  - The Savings and Credit Cooperative Societies (SACCOs) sector in Kenya plays a critical role in promoting financial inclusion through the provision of affordable savings and credit services. However, despite growth in assets and membership, deposit-taking SACCOs (DT-SACCOs) continue to face challenges, including slow loan processing, increasing customer complaints, operational inefficiencies, and declining stakeholder confidence. These challenges highlight the need to strengthen organizational capabilities, particularly network development capability. This study examined the predictive power of network development capability on the performance of DT-SACCOs in Nairobi City County, Kenya. The study was anchored on Relational View Theory, Dynamic Capabilities Theory, and the Balanced Scorecard Model. An explanatory research design was adopted. The target population comprised 475 senior- and middle-level management employees from 41 DT-SACCOs, from which a sample of 215 respondents was selected using proportionate stratified sampling. Data were collected using semi-structured questionnaires comprising both closed- and open-ended questions. Quantitative data were analyzed using descriptive and inferential statistics with the aid of SPSS, while qualitative responses were analyzed thematically. The findings revealed that network development capability had a positive and statistically significant predictive effect on firm performance (β = 0.462, p = 0.001). The qualitative findings further indicated that strategic partnerships, trust building, strategic alignment, communication, and network governance were important aspects of network development capability, although challenges remained in implementing collaborative projects, optimizing relationships, and integrating communication systems. The study concludes that strengthening network development capability can enhance the performance of DT-SACCOs. It therefore recommends that SACCOs prioritize trust building, formalize partnership agreements, strengthen communication and coordination mechanisms, and align networking activities with strategic objectives to improve operational efficiency, customer satisfaction, stakeholder confidence, and overall organizational performance.
VL  - 12
IS  - 5
ER  -

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Veronica Wanjiru Ruo

Department of Business Administration, Kenyatta University, Nairobi, Kenya

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http://orcid.org/0009-0009-4343-6940
Godfrey Muigai Kinyua

Department of Business Administration, Kenyatta University, Nairobi, Kenya

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http://orcid.org/0000-0002-9676-7630

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Ruo, V. W., Kinyua, G. M. (2026). Predictive Power of Network Development Capability on Firm Performance: Empirical Evidence from Deposit-Taking Savings and Credit Cooperative Societies in Kenya. European Business & Management, 12(5), 86-99. https://doi.org/10.11648/j.ebm.20261205.11

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Ruo, V. W.; Kinyua, G. M. Predictive Power of Network Development Capability on Firm Performance: Empirical Evidence from Deposit-Taking Savings and Credit Cooperative Societies in Kenya. Eur. Bus. Manag. 2026, 12(5), 86-99. doi: 10.11648/j.ebm.20261205.11

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Ruo VW, Kinyua GM. Predictive Power of Network Development Capability on Firm Performance: Empirical Evidence from Deposit-Taking Savings and Credit Cooperative Societies in Kenya. Eur Bus Manag. 2026;12(5):86-99. doi: 10.11648/j.ebm.20261205.11

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@article{10.11648/j.ebm.20261205.11,
  author = {Veronica Wanjiru Ruo and Godfrey Muigai Kinyua},
  title = {Predictive Power of Network Development Capability on Firm Performance: Empirical Evidence from Deposit-Taking Savings and Credit Cooperative Societies in Kenya},
  journal = {European Business & Management},
  volume = {12},
  number = {5},
  pages = {86-99},
  doi = {10.11648/j.ebm.20261205.11},
  url = {https://doi.org/10.11648/j.ebm.20261205.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ebm.20261205.11},
  abstract = {The Savings and Credit Cooperative Societies (SACCOs) sector in Kenya plays a critical role in promoting financial inclusion through the provision of affordable savings and credit services. However, despite growth in assets and membership, deposit-taking SACCOs (DT-SACCOs) continue to face challenges, including slow loan processing, increasing customer complaints, operational inefficiencies, and declining stakeholder confidence. These challenges highlight the need to strengthen organizational capabilities, particularly network development capability. This study examined the predictive power of network development capability on the performance of DT-SACCOs in Nairobi City County, Kenya. The study was anchored on Relational View Theory, Dynamic Capabilities Theory, and the Balanced Scorecard Model. An explanatory research design was adopted. The target population comprised 475 senior- and middle-level management employees from 41 DT-SACCOs, from which a sample of 215 respondents was selected using proportionate stratified sampling. Data were collected using semi-structured questionnaires comprising both closed- and open-ended questions. Quantitative data were analyzed using descriptive and inferential statistics with the aid of SPSS, while qualitative responses were analyzed thematically. The findings revealed that network development capability had a positive and statistically significant predictive effect on firm performance (β = 0.462, p = 0.001). The qualitative findings further indicated that strategic partnerships, trust building, strategic alignment, communication, and network governance were important aspects of network development capability, although challenges remained in implementing collaborative projects, optimizing relationships, and integrating communication systems. The study concludes that strengthening network development capability can enhance the performance of DT-SACCOs. It therefore recommends that SACCOs prioritize trust building, formalize partnership agreements, strengthen communication and coordination mechanisms, and align networking activities with strategic objectives to improve operational efficiency, customer satisfaction, stakeholder confidence, and overall organizational performance.},
 year = {2026}
}

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TY  - JOUR
T1  - Predictive Power of Network Development Capability on Firm Performance: Empirical Evidence from Deposit-Taking Savings and Credit Cooperative Societies in Kenya
AU  - Veronica Wanjiru Ruo
AU  - Godfrey Muigai Kinyua
Y1  - 2026/09/27
PY  - 2026
N1  - https://doi.org/10.11648/j.ebm.20261205.11
DO  - 10.11648/j.ebm.20261205.11
T2  - European Business & Management
JF  - European Business & Management
JO  - European Business & Management
SP  - 86
EP  - 99
PB  - Science Publishing Group
SN  - 2575-5811
UR  - https://doi.org/10.11648/j.ebm.20261205.11
AB  - The Savings and Credit Cooperative Societies (SACCOs) sector in Kenya plays a critical role in promoting financial inclusion through the provision of affordable savings and credit services. However, despite growth in assets and membership, deposit-taking SACCOs (DT-SACCOs) continue to face challenges, including slow loan processing, increasing customer complaints, operational inefficiencies, and declining stakeholder confidence. These challenges highlight the need to strengthen organizational capabilities, particularly network development capability. This study examined the predictive power of network development capability on the performance of DT-SACCOs in Nairobi City County, Kenya. The study was anchored on Relational View Theory, Dynamic Capabilities Theory, and the Balanced Scorecard Model. An explanatory research design was adopted. The target population comprised 475 senior- and middle-level management employees from 41 DT-SACCOs, from which a sample of 215 respondents was selected using proportionate stratified sampling. Data were collected using semi-structured questionnaires comprising both closed- and open-ended questions. Quantitative data were analyzed using descriptive and inferential statistics with the aid of SPSS, while qualitative responses were analyzed thematically. The findings revealed that network development capability had a positive and statistically significant predictive effect on firm performance (β = 0.462, p = 0.001). The qualitative findings further indicated that strategic partnerships, trust building, strategic alignment, communication, and network governance were important aspects of network development capability, although challenges remained in implementing collaborative projects, optimizing relationships, and integrating communication systems. The study concludes that strengthening network development capability can enhance the performance of DT-SACCOs. It therefore recommends that SACCOs prioritize trust building, formalize partnership agreements, strengthen communication and coordination mechanisms, and align networking activities with strategic objectives to improve operational efficiency, customer satisfaction, stakeholder confidence, and overall organizational performance.
VL  - 12
IS  - 5
ER  -

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