iarjbmIARJBMIARJBM2708-5147https://doi.org/10.47310/iarjbm.2022.v03i02.012Relationship Between Financing Types and Financial Performance of Saccos in Siaya County-KenyaDuncanJoelOmondiJosephMwanzaMaryNelimaLyaniStudent MBA, Catholic University of Eastern AfricaLecturer- School of Business, Catholic University of Eastern AfricaSavings and Credit Cooperative Societies (SACCOs) play an essential role in economic development as part of the financial system. This study focused on establishing the relationship between financing types and Financial Performance of SACCOs in Siaya County. The study was anchored on David Durand’s Net Income Theory of Capital Structure developed in 1952. The study adopted correlation research approach. The researcher made use of panel data from final statements of registered SACCOs in County. There were 150 SACCOs registered by the department of Trade and Cooperatives in Siaya County as at 31st December 2019. Out of theses only 30 SACCOs were active and properly audited and hence the researcher conveniently chose them, however 9 of them lacked crucial data for this study hence the researcher arrived at 21 SACCOs from which data was drawn and analyzed. The data was analyzed by use of descriptive and inferential statistical techniques. Correlation and regression and ANOVA analysis were performed. The findings of the study revealed that Retained earnings, members share capital and external borrowing have a weak relationship with performance in SACCOS in Siaya County and move in the opposite direction also. (r = -0.218, -0.283, -0.253) while members deposit moves in the same direction (r = 0.319) with Financial performance as measures by ROA. Results of regression revealed that 50.3% variations in financial performance (ROA) of SACCOs in Siaya is explained by retained earnings, member’s deposits, members share capital and external borrowing as a ratio of total assets. ANOVA results show that the four financing types have no significant differences in explaining performance in SACCOs in Siaya. The results also reveal that The p-values for all the four financing types as a ratio of total assets of the SACCOs are less than 0.05 implying that at 95% confidence level there is a significant relationship between financing types and performance of Sacco’s in Siaya County. The researcher concluded that retained earnings, members’ deposits, share capital and external borrowing had significant positive relationship with financial performance except with member’s deposit which has significant but negative relationship with Financial performance of SACCOs. The researcher recommends that Savings and Credit Cooperative Societies in Siaya County should do aggressive member recruitment as this influences SACCO performance. This study further recommends that SACCOs in Siaya County should aim at retaining more of the surplus, mobilizing more shares from members and using externally borrowed funds as a way of increasing financial performance (ROA) ratio. Therefore, the relevant policies of the SACCOs should be revised to conform to these findings, especially retention policy, investment policy and savings policy.