Credit management and growth of savings and credit cooperative organizations in Kampala district

Abstract

This study investigated the relationship between credit management and growth of Savings and Credit Cooperative organizations in Kampala District. The specific objectives that guided the study were; to assess the credit management procedure used by SACCOs, to establish the growth status of SACCOs, examine the relationship between credit management and growth of SACCOs and to establish the influence of the competitive environment on the relationship between credit management and growth of SACCOs in Kampala district. The study adopted a cross sectional descriptive survey design that used a quantitative approach to analyze a sample of 115 SACCOs which were selected using simple random sampling technique from the five divisions of Kampala District. Data was collected using self-administered structured questionnaires. The results indicated that that all the three predictors, loan processing (β = 0.300, p value = 0.000), credit monitoring (β = 0.726, p value = 0.000) and loan recovery (β = 0.405, p value =0.004) are significant positive predictors of the Growth of SACCOs in Kampala District. The study further established that the competitive environment has a significant influence on the relationship between credit management and the growth of SACCOs. The study recommended that in their attempt to improve credit management and in order to improve their growth, SACCOs should give more attention to improving credit monitoring and loan recovery strategies while also endeavoring to mitigate the competitive environment forces, namely buyer power, new entrants and competitive rivalry.