Effect of Investment Appraisal on Performance of Housing Cooperative Societies in North Rift Region Counties

Abstract

Housing is one of the largest concerns facing most countries of the world, where the increase in the numbers of the population are not corresponding with the available resources. Consequently, housing cooperative societies were introduced as a solution put forward to try to plug in the lack of housing, as part of the local communities' contributions in the housing sector, which can be considered as one of the most important actors in this sector. The housing sector in Kenya is still facing shortage of houses with regard with the number of residents in need of housing. Hence, the current study sought to mainly determine the effect of investment appraisal on performance of housing cooperatives in North region counties, Kenya. The study was guided by investment theory. The target population was 56 respondents from housing cooperatives registered by NACHU in the North Rift Region by the end of July 2018. Primary data was used and the data was collected using open self-structured questionnaires. Content validity was used to determine the validity while and Cronbach alpha coefficient was used to determine the reliability of research instrument. Data was analyzed using both descriptive and inferential statistics. For descriptive statistics frequency tables, graphs, percentages, and means were used and for inferential statistics correction and inferential statistics were used to analyze the data. The SPSS Version 24 helped in the data analysis. The study findings indicated that investment appraisal has a positive and statistically significant effect on performance of housing cooperative societies with (r=0.652; p<0.05). The study concluded that Housing cooperative always establishes the cash inflows of the project and compares it with the outflows before selecting where invest. The study also recommends to the financial managers of housing cooperative association to maintain and invest in the projects which give returns on initial capital the shortest period for posterity and relevance in the market.