The purpose of the study was to assess the influence of cross borrowing on financial performance of Savings and Credit Co-operatives (SACCOs) in Eldama Ravine Sub-County. The specific objectives of the study were to assess the effect of adverse selection and credit policies on financial performance of SACCOs. Data was collected using a structured questionnaire and analyzed using descriptive and inferential statistics. The target population of the study comprised 150 Board members, SACCO unionizable staff and SACCO management staff. Stratified random sampling was used to obtain a sample size of 107 respondents. Data analysis was done using SPSS version 20. From the analysis, adverse selection was found to strongly influence financial performance than credit policy. Since adverse selection was a significant factor, SACCOs should share credit information between themselves and with other lenders. They should also update their credit policies and develop enhanced strategies to mitigate risk associated with credit policy.