A Research project submitted ia partial fulfillment of the requirement for the conferment of the degree of master of Business Administration of Meru University of Science and Technology

There is more to innovation than commercializing ideas and inventions. What is labeled as an innovation may have little or no novelty in practice but a slight change in the use or application of the innovation. This study explored the area of innovation and performance of SACCOs in Meru County guided by the following objectives: To determine the effect of process innovation on the financial performance of SACCOs in Meru County; to establish how product innovation affects financial performance; evaluate institutional innovation and financial performance of SACCOs in Meru County. The study was anchored on Schumpeter's innovation theory; Task Technology fit theory, and Theory of Induced Institutional innovation. The study was conducted using a descriptive survey research approach. The target population of 162 respondents was drawn from the 18 SACCOs licensed by SASRA to operate in Meru County. It comprised staff from the marketing, credit, accounting, customer service department, and management. The population was divided into strata, and random samples were taken from each stratum to ensure adequate representation of all classes of employees and reduce the probability of respondent biases. Questionnaires were administered to the sampled respondents, and statistical analysis was conducted using the Statistical Package for Social Sciences (SPSS) to compute descriptive statistics and regression analysis. The Model summary of the regression analysis showed that all the independent variables accounted for 51.3% of the variance of Sacco's performance. Process, Product, and institution innovation had a positive correlation with the financial performance of
SACCOs in Meru County. According to the study, SACCOs should reconsider how innovative their organization is by placing a higher priority on investing in self-service digital channels than on spending money to open new branches. As a result, they will be able to take advantage of the opportunities offered by digitization.