Credit risk, liquidity risk, risk management and loan portfolio quality of savings and credit cooperative organisations in West Nile Region of Uganda
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There has been a lot of anxiety among members of the general public, policy makers, managers and development partners in microfinance about the poor performance of loan portfolio of Savings and Credit Co-operative Organizations in Uganda as a result this study was carried out to establish whether the Savings and Credit Co-operative Organization apply tools of risk management to measure, monitor, control and efficiently manage risks in order to enhance loan portfolio quality. A correlation and regression models were used to measure the strength of the relationship and prediction of factors that cause change in dependent variable respectively, the factors that cause change in the dependent variable for the study included; credit risk, liquidity risk and risk management. The research results show, credit risk is negatively related to Loan Portfolio, Liquidity risk is negatively related to loan portfolio quality, risk management is positively related to Loan Portfolio Quality and Credit risk and liquidity risk are negatively related to risk management. The recommendations include; train SACCO managers, loan officers and loan committee board members on risk management so that they can efficiently handle risks that affect loan transactions hence enhance loan portfolio quality. evaluate risk tools in order to adjust or identify changes so that only less costly and efficient tools are employed in assessment of client credit worthiness thus improvement in loan portfolio quality, evaluate the appraisal systems to ensure only credit worth clients are advanced loans that they can repay in this way loan portfolio quality will be enhanced.