Credit Cooperative Societies Research Articles

Credit Risk Management Practices and Asset Quality of Deposit Taking Savings and Credit Co-operative Societies in Kenya

Despite the key role DT-SACCOs play towards the growth of Kenyan economy, there is reported increasing occurrence of unsustainable levels of NPLs among these financial institutions. The increasing occurrence of NPLs are significantly obstructing asset quality; highly threatening their survival. This study closed this gap by assessing; risk identification, risk measurement, risk monitoring, and risk governance.as determinants of Kenya DT-SACCOs. The study used descriptive research design with the credit managers of Kenya's 176 licensed DT-SACCOs as the target population. The study employed census because the sample size was modest, easily accessible, and controllable. The data for the study was gathered from primary sources utilizing questionnaire. To create descriptive statistics for the study, the data was analyzed using quantitative analysis. Inferential statistics was then used to obtain a model. The study found that, at 5% significance level, risk identification has positive significant effect on asset quality of DT-SACCOS in Kenya in Kenya (p=0.015; β= 0.337; r= 0.394). risk measurement has a statistically significant and positive effect on asset quality of DT-SACCOS in Kenya (p=0.023; β=0.212; r= 0.358), risk monitoring has positive significant effect on asset quality of DT-SACCOS in Kenya (p= 0.049; β= 0.182; r= 0467) and risk governance positively and significantly affects asset quality of DT-SACCOS in Kenya (p= 0.034; β= 0.236; r= 0.470). The study recommends that the DT-SACCOS in Kenya should; enhance their risk identification policies by ensuring that their procedure authenticity of business proposal and business plan are effective to bale to identify credit risks and net worth of the borrowers, enhance their risk measurement procedure to ensure that there is thorough analysis and appraisal of the borrower before approving loan. enhance their risk monitoring polices and procedures to ensure approval authorities are well specified and empowered, and ensure their risk governance guidelines correctly address credit procedures and policies on review and recommendations and clearly spell out the requirements concerning checks on collateral of the borrower during credit review.

The Mediating Effects of Board Role Performance in the Relationship Between Board Capital and Survival of Financial Cooperatives in Uganda

Savings and Credit Cooperative Societies (SACCOs) in Uganda face persistent survival challenges, often associated with governance limitations and board effectiveness issues. This study investigates the association between board capital, which encompasses both human and social capital, and SACCO survival—measured through liquidity and gearing—with board role performance as a potential mediator. Data were collected from 311 participants across 60 SACCOs in a cross-sectional survey. Structural equation modeling analysis indicates that although board capital does not directly influence SACCO survival, it positively correlates with board role performance, which in turn is significantly associated with SACCO survival outcomes of liquidity and gearing. These findings underscore the importance of board engagement in translating board members’ collective expertise, knowledge, and external connections into enhanced liquidity and balanced gearing for SACCOs. Practical implications suggest that SACCOs could benefit from initiatives to strengthen board members' skills and networking capabilities through targeted training, mentorship, and structured networking opportunities. Establishing clear board roles, strengthening accountability mechanisms, and implementing regular performance evaluations are essential practices to bolster SACCO survival. This study contributes a novel perspective by integrating Role Theory with Agency and Resource Dependency Theories, providing a multi-theoretical framework to better understand SACCO survival in a developing economy context. This integration enriches the theoretical landscape and provides actionable insights for strengthening SACCO survival in Uganda’s challenging economic context.

Investment Allowance and Financial Performance of Dt-Saccos in Nairobi County, Kenya

Purpose: The main objective of the study was to determine the effect of investment allowance on financial performance of DT-SACCOS in Nairobi County, Kenya. Methodology: This study utilized explanatory research design to investigate the influence of tax policies, including investment allowances, accelerated depreciation, and capital gains tax exemption, on the financial health of Deposit Taking SACCOs in Nairobi County, Kenya. The study used advanced estimation techniques, such as correlation and panel data regression models to estimate the relationship. Results: The study established that investment allowance has a significant negative impact on the financial performance of deposit-taking savings and credit cooperative societies (DT-SACCOs) in Nairobi County. Conclusion: Investment allowances, despite their negative association with financial performance, offer a valuable opportunity for DT-SACCOS to reduce taxable income and optimize investment in growth-enhancing assets. However, this should be balanced with careful planning to avoid potential adverse effects on financial performance.

Relationship Marketing and Customer Loyalty among Deposit-Taking SACCOS in Western Kenya

Deposit-taking Savings and Credit Cooperative Societies (SACCOS) in Kenya have faced significant challenges due to intense competition and declining customer numbers, which underscores the need for further investigation into relationship marketing strategies. A key research gap is the role of digital platforms in moderating the effectiveness of these strategies and their impact on customer loyalty. This study aimed to evaluate how digital platforms influence the relationship between relationship marketing (RM) and customer loyalty among SACCOs in Western Kenya. Using Relationship Commitment, Social Exchange, and Commitment Trust theories, the research focused on 23 SACCOs with 37,137 customers and surveyed 396 respondents, including prior pilot study. Descriptive and correlational research designs were used, with data collected via self-administered questionnaires and systematic sampling. Analysis with SPSS assessed validity and reliability, employing descriptive statistics and inferential methods such as Pearson’s Correlation, Simple Linear Regression, and Hierarchical Regression Analysis. Assumption tests confirmed that the research data met normality, linearity, homoscedasticity, and multicollinearity criteria, with a response rate of 87.63% and significant correlations (p<0.05) among variables. Digital Platforms were found to contribute significant moderating role on the link between Relationship Management and Customer Loyalty (p<0.05), emphasizing features like interactivity, personalization, and trustworthiness. The results suggest that in order to enhance customer experience, SACCOs should allocate resources towards the development of user-friendly digital platforms, utilize data analytics in targeted marketing efforts, so as to enhance engagement with the community via online channels. Moreover, it is crucial for SACCOs to prioritize personalized service, establish trust, and strive for continuous improvement, while taking into account regulatory revisions, in order to maximize the effectiveness of digital platforms within the financial sector.

Bird-View Exploration of Internal Controls and Financial Performance of Selected Savings and Credit Co-Operative Societies in Moyo District, Uganda

This article explores internal controls and financial performance of selected savings and credit cooperative societies in Moyo district, Uganda. Utilizing both qualitative and quantitative methodologies, a descriptive cross-sectional research design was employed. The population consists of 56 participants. Data was collected with surveys and interviews. Findings revealed that internal controls are the pillar of any financial institution and SACCOs are not excluded and good financial performance is the motive for having good internal controls implemented in the SACCOs. In spite of the role played by internal controls, SACCOs have continued to face challenges relating to liquidity, profitability, efficiency; in terms of cost per borrower, and alleged malpractices. The above challenges could be attributed to weak internal control system, as this sets a base for misappropriation of organization’s resources. It is on this note that the study calls for the implementation of a systematic risk assessment process that identifies, assesses, and mitigates risks. Regularly update risk assessments to adapt to changing circumstances. More so, there is need to maintain effective internal control communication and proper flow of information down, across, and up within all sections of the organization. This includes clear communication of roles and responsibilities. Invest in continuous training and education for SACCO staff and members to ensure they have a strong understanding of internal controls, ethics, and risk management. Develop and regularly update comprehensive policies and procedures that clearly outline internal control processes, responsibilities, and expectations. This can serve as a guide for staff and members and ensure consistency in control activities. Keywords: Credits, Cooperative societies, Financial performance, Internal controls, Savings.

The effect of service concept on customer acquisition: the moderating role of manager’s experience on Savings and Credit Cooperative Societies in Tanzania

PurposeThis study aims to investigate the influence of the service concept on customer acquisition and when the relationship is moderated with manager’s experience in Savings and Credit Cooperative Societies (SACCOS) within Dar es Salaam City, Tanzania.Design/methodology/approachThe study adopts a cross-sectional research design and utilizes simple random sampling to select 226 respondents, all of whom are managers of SACCOS in Tanzania. Data were collected through a questionnaire and analyzed using a partial least square structural equation modeling (PLS-SEM).FindingsThe findings indicate that service concept have a highly statistically significant impact on customer acquisition, with a p-value of less than 0.05. Conversely, managers’ experience also influences customer acquisition by the p-value of less than 0.05. The result also confirms the significance influence of positive moderating effect of manager’s experience on the relationship between service concept and customer acquisition, with a p-value of less than 0.05, therefore it shows that manager’s experience facilitate the influence of service concept to customer acquisition.Practical implicationsThe findings of this study provide valuable insights for SACCOS aiming to thrive and attract more customers. By understanding the nuances of service concepts, these institutions can refine their strategies for customer acquisition effectively.Originality/valueThe study’s insights into the composite effect of service concepts hold significance for SACCOS seeking to enhance their customer acquisition strategies enhanced by manager’s experience. These findings contribute new perspectives to the SACCOS and other related financial services sector, offering fresh insights into innovation and customer-centric approaches.

Influence of Savings and Credit Co-operative Societies in Enhancing Debt Management Literacy among Members in Moshi Municipality, Tanzania

The study explored how Savings and Credit Cooperative Societies (SACCOs) enhance debt management literacy among members in Moshi Municipality, guided by Financial Socialization Theory. Using a convergent design under a mixed methods approach, the target population included nine SACCOs, 13,053 clients, and 20 employees. A sample of 3 SACCOs, 100 customers, and 5 managers was selected through simple random, stratified random, and purposive sampling techniques. Data were collected via questionnaires for customers and interviews for staff members. Validity was ensured by presenting the instruments to research experts, and a pilot test involving 35 participants assessed reliability, with Cronbach's alpha calculated at 0.95, indicating high reliability. The findings revealed that SACCO members generally acknowledge the organizations' role in promoting debt management skills. However, perspectives varied on the effectiveness of the training provided. The study recommended that SACCOs empower members to manage their cash flow better, offering practical knowledge and skills for debt and cash flow management. In conclusion, it emphasized the importance of SACCOs in equipping members with the necessary tools to improve their financial literacy and debt management capabilities.

Sacco Based Financial Characteristics and Financial Performance of Deposit Taking Savings and Credit Co-operative Societies in Kenya

In Kenya, Deposit-Taking Savings and Credit Cooperative Societies have faced significant challenges that have adversely impacted their financial performance. While existing literature has linked financial performance to financial characteristics, there remain conceptual and contextual gaps in empirical research. These gaps prompted the current study to examine SACCO-based financial characteristics as a tool for enhancing the financial performance of DT-SACCOs in Kenya. The study employed a descriptive research design, targeting a population of 190 DT-SACCOs. Using purposive sampling, 181 SACCOs that had been operational since 2018 were selected for analysis. Secondary data from the period 2018 to 2023 were utilized, and a quantitative approach was applied to generate both descriptive and inferential statistics. Panel regression was used to estimate the direct relationship between SACCO-based financial characteristics and financial performance, while also appraising how the Sacco Societies Regulatory Authority risk regulations moderated this relationship. The study concluded that capital adequacy had a statistically significant positive effect on financial performance, indicating that stronger capital buffers enhance profitability. In contrast, asset quality and financial investments showed statistically significant negative effects, suggesting that poor loan quality and mismanaged investments negatively impact financial outcomes. Liquidity, however, was positively associated with financial performance, underscoring the importance of maintaining adequate liquidity reserves. Moreover, the relationship between SACCO-based financial characteristics and financial performance was significantly moderated by SASRA risk regulations, highlighting the critical role of regulatory oversight in shaping financial outcomes. Based on these findings, the study recommends that DT-SACCOs in Kenya should: maintain optimal capital adequacy levels to safeguard financial stability; prioritize careful asset quality management and regular loan monitoring to develop sound lending policies; optimize financial investments to ensure sufficient funding for operational expenses; and maintain adequate liquidity levels to meet financial obligations and improve overall performance.

Examining the Internal Controls and Financial Performance of Selected Savings and Credit Cooperative Societies in Moyo District, Uganda

This research study examined the effect of internal controls on financial performance Savings and Credit Co-operative Societies (SACCOs) in Moyo district of Uganda. Utilizing both qualitative and quantitative methodologies, a descriptive cross-sectional research design was employed. The population consists of 56 participants. Data was collected with surveys and interviews. The study’s findings demonstrated that the control environment in the chosen SACCOs in Moyo district had a beneficial impact on financial performance. This is corroborated by the favourable internal control ratings and the highly satisfying view of the accounting and financial system of the chosen SACCOs. And well-constructed control environment has the potential to strengthen the entire governance and administration of SACCOs, resulting in enhanced financial performance. Based on these findings, the study calls for SACCOs to prioritize ethical values in their organizational culture. This includes promoting honesty, integrity, and accountability among staff and management. Ensure that the board of directors maintain their independence from management. This can be achieved by implementing governance structures that prevent conflicts of interest. Continuously adhere to audit standards and best practices to maintain high-quality financial reporting and internal controls. It is equally recommended that SACCOs should conduct periodic internal reviews of control activities to identify weaknesses and areas for improvement. It is recommended that management be tasked with the responsibility of promptly reviewing audit reports and resolving any non-compliance issues identified within them. Keywords: Stewardship, Internal controls, Savings, Cooperative societies, Financial performance.

The Role of Savings and Credit Cooperative Societies in Financially Supporting Employed Women in Dar es Salaam, Tanzania: A Case Study of CRDB Workers SACCOS

Savings and Credit Cooperative Societies (SACCOS) are financial cooperatives that aim to meet the financial needs of different population segments, including women, men, or other specified categories. The primary role of these financial institutions is to improve the socio-economic development of their registered members and the community at large. The aim of this study was to determine the effects of SACCOS on women's financial accessibility, specifically focusing on those working with the Cooperative Rural Development Bank (CRDB) in Dar es Salaam. The research was grounded in Agency Theory and Stakeholder Theory. A descriptive research design was employed, and quantitative analysis was performed. A sample of 80 respondents was randomly selected from a population of 1,700 members of the CRDB workers’ SACCOs. The study utilized observation, surveys, and questionnaires. Secondary data sources included newspapers, journal articles, books, SACCO manuals, and authoritative internet sources. Simple descriptive methods were used to present the study's results, while percentages were used to highlight numerical patterns. Quantitative data was analyzed using Excel. The results showed that over 77% of SACCO's female members experienced better socio-economic conditions compared to non-members. The study recognized that quick access to finance through SACCO services significantly improved the standard of living, particularly for women. Although these women work with the bank, SACCO services have enabled them to access more finance than they would typically qualify for through the bank. However, SACCOs face several constraints, including poor management, lack of training opportunities for members, high-interest rates, and societal perceptions of women (segregation). These factors have presented challenges to the performance of SACCOs. The study recommends that members receive training on how to improve the performance of SACCOs to better leverage the services provided. In general, the government should amend and enforce policies related to governance, financial management, and the proper management of accounting and strategies that strengthen SACCOs. This would enhance their ability to support women’s access to finance, leading to improved socio-economic development.

Savings and Credit Cooperative Societies (SACCOS) Members’ Perception on Loan Services

The study examined members' perceptions of SACCOS' credit facilities. The study used descriptive research methods, statistics, factor analysis, and ANOVA to examine members' perceptions of credit facilities offered by SACCOS in Ethiopia. It involved 400 members from 30 selected SACCOS who completed 23 closed-ended questionnaires. The study based its results on four factors: credit volume, customer service, impartiality, and affordability. Timely lending, informed action on default, fair repayment periods, and simple application formalities influenced the credit volume. Borrower capacity, reasonable interest rates, and satisfactory loan distribution were all examples of customer service. Moreover, geographic location did not significantly influence perceptions.

Aspects of Growth in the District Central Co-Operative Bank in India

The reserves are essential to Co-operative banks since they are involved in so many different aspects of the banking industry. The Credit Co-operative Societies Act, which was subsequently revised in 1912, and the establishment of Co-operative banks with an installation base were both done by the government in 1904. Rather of emphasising rural financing, the main Agriculture Credit Co-operative Society Act concentrates on long-term credit. The article’s objectives are to evaluate the reserve funds and deposits of Indian Co-operative banks and investigate their development factors. Journals, papers, and other publications will be among the sources from which secondary data will be gathered. The data will be interpreted and analysed using statistical methods, and the results will be examined using charts, bar graphs, clustered column graphs, and Pai charts.

Capital Adequacy and Financial Performance of Deposit Taking Savings and Credit Cooperative Societies in Kenya

Capital Adequacy and Financial Performance of Deposit Taking Savings and Credit Cooperative Societies in Kenya

Leadership Capability and the Competitive Advantage of Deposit-Taking Savings and Credit Co-Operative Societies in Kenya

Leadership Capability and the Competitive Advantage of Deposit-Taking Savings and Credit Co-Operative Societies in Kenya

Asset Quality and Financial Performance of Deposit Taking Savings and Credit Cooperative Societies in Kenya

Asset Quality and Financial Performance of Deposit Taking Savings and Credit Cooperative Societies in Kenya

Effect of Investment Decisions on Efficiency of Deposit Taking Savings and Credit Cooperative Societies in Nairobi County, Kenya

With growing competition globally, SACCOs are directing their energies on investments to enhance their efficiency and so as to survive extreme competition. However, the decision to invest is subjective and a wrong investment decision can lead companies even to bankruptcy. Investment choices can also be made in compliance with the conditions in the markets, the portfolio level divergence, the results of fundamental and technical analysis, along with what the investors and managers expect and prefer. This study’s intent was to determine how investment decisions impact the efficiency of deposit taking SACCOs in Nairobi. The study’s population was all the 43 DT-SACCOs in Nairobi County, Kenya. The independent variable for the study was investment decisions with four measures; investment in real estate, investment in government securities, investment in fixed deposit and investment in shares. The control variables were liquidity, firm size and liquidity. Firm efficiency was the response variable which was the primary focus of the study. The study utilized secondary data from 2014 to 2018 (5 years) on annual basis. A descriptive cross-sectional design together with the multiple linear regression model were used for the analysis of the variables. For this analysis the researcher used the SPSS version 21 software. The findings gave an R-square value of 0.317 meaning that 31.7 percent changes in the efficiency of DT-SACCOs in Nairobi, Kenya can be attributed to the seven selected predictor variables while 68.3 percent changes of efficiency of DT-SACCOs was attributable to other factors outside the scope of the study. It was further revealed that the predictor variables showed a strong correlation with efficiency (R=0.563). ANOVA results show that the F statistic was substantial at 5% level with a p=0.000. This shows the model was suitable for the study to provide an explanation of the variables. The results also showed that investment in real estate, investment in government securities and investment in shares produced positive and statistically substantial values for this study while investment in fixed deposits, liquidity, firm size and age were found to be statistically insignificant determiners of efficiency. This study recommends that measures should be put in place to enhance investment in government securities, real estate and shares as these three have a substantial influence on efficiency of DT-SACCOs in Nairobi. Keywords: Investment decisions, firm efficiency, liquidity, firm size, firm age

Corporate Governance and the Value Relevance of Financial Information in Tanzanian Savings and Credit Cooperatives: A Panel-Data Approach

The study examined the influence of corporate governance on the relevance of financial information towards the value of Savings and Credit Cooperative Societies (SACCOS) in Tanzania. Thus far, evidence on how corporate governance influences the relevance of financial information in cooperative societies is limited globally, notably in emerging economies. Therefore, this research contributes to the body of knowledge by extending the application of agency theory to determine this relationship among variables. The study specifically employed a quantitative panel data set of 202 SACCOs from 2013 to 2020 that was gathered from yearly financial reports and processed through descriptive analysis and regression models. Descriptive statistics demonstrate that the SACCOs' value in Tanzania is increasing. Empirical results show a significant positive relationship between earnings financial information and the value of SACCOS; the book value of equity financial information insignificantly influences the value of SACCOS. The findings deliver empirical and theoretical backing for the notion that board size, skills and supervisory committee skills have a significant impact on the relevance of financial information towards the value of the firm. However, the examination showed no proof that the number of meetings affected the relevance of financial information. This implies that Policymakers should make reforms that will enable SACCOs to improve the quality of financial information and widen the publication of financial reports through effective corporate governance, including the emphasis on online publications.

Evaluation of the Financial Performance of Chikkamagaluru DCC Bank of Karnataka

The establishment of the cooperative banking system in India may be attributed to the enactment of the Cooperative Credit Societies Act in 1904. This legislation aimed to facilitate the provision of production credit to farmers. In 1912, amendments were made to the Act of 1904 to facilitate the establishment of central cooperative banks at the district level. The legislation was designed to give the act a federal character with three tiers in order to promote the growth of cooperative banks. The objectives are The objective is to analyse the Working Capital and Total Advances of DCC Bank in Chikkamagaluru District, as well as assess the Short-Term and Medium-Term Agricultural Loans offered by the same bank in the same district.

Influence of Cash Management on Financial Performance of Selected Savings and Credit Cooperative Societies in Meru County, Kenya

Influence of Cash Management on Financial Performance of Selected Savings and Credit Cooperative Societies in Meru County, Kenya

INFLUENCE OF FINANCIAL STATEMENTS RATIO ANALYSIS ON THE PERFORMANCE OF SAVINGS AND CREDIT CO-OPERATIVE SOCIETY IN KAKAMEGA COUNTY, KENYA

An essential function of Savings and Credit Cooperative Societies (SACCOS) is to provide financial services to the underprivileged, who are not eligible for services provided by Formal Financial Institutions (FFIs). These SACCOS, however, face a number of difficulties that could affect how well they operate as a whole. The purpose of this study is to look into how financial statement analysis affects SACCO’s performance in Kakamega, Kenya. Examining a company's financial statements such as the income statement, cash flow statement, and balance sheet in order to evaluate its financial performance and make informed investment decisions is known as financial statement analysis. Because Kakamega, Kenya, has a large number of SACCOS and little research has been done in the area, it was chosen as the study location. Kakamega considerable agricultural output and comparatively high rates of poverty make it an ideal place to research how SACCOS help the underprivileged get financial access. The study specifically looked at how ratio analysis affects the performance of Sacco's in Kakamega, Kenya. The inquiry was conducted using a survey research design because it allows for the manipulation of variables and allows the researcher to choose and study distinct groups of people at one time. There were 830 respondents in the study population, of which 400 respondents made up the sample size determined by applying the Krecjie and Morgan methodology. Document analysis, interviews, and questionnaires were used to gather data. In order to examine the collected data, descriptive statistics such as means, frequencies, and percentages was used. A summary of the quantitative data was used to measure how strongly the variables are related. To determine the link between the independent and dependent variables, the researcher performed a multiple linear regression analysis. The study finished with a discussion of the significance of the findings for the success of SACCOS in Kakamega, Kenya, and recommendations for further research. The results were presented as tables, graphs, and pie charts. The study concluded that the majority of SACCOs in Kakamega, Kenya, recognize the significance of ratio analysis in monitoring and enhancing financial performance. With 85.3% of SACCOs employing ratio analysis, and recommended that the Policymakers can develop and enforce policies that promote the standardization of financial reporting practices across SACCOs. This can involve the establishment of guidelines, regulations, and reporting frameworks to ensure consistency and comparability in financial reporting KEY WORDS: Financial Statements Analysis, Ratio Analysis Performance, Savings and Credit Co-Operative Society