Examining corporate governance practices of savings and credit cooperative organizations: A case study of Wakiso District
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The Corporate governance practices are important components in the management and control of SACCOs. In Uganda, SACCOs create an important part of the economy. Actually, operation wealth creation recognizes SACCOs as a prime mover in financial resource mobilization to create a vibrant and globally competitive financial sector in Uganda. However, SACCOs like any other business, are faced with challenges in their quest for growth and corporate governance stand as one of the main challenges facing SACCOs. Some of these SACCOs have come under spotlight for cases of mismanagement and a number of them have closed and therefore if this trend is not checked, it may lead to depletion of SACCOs’ funds and collapse of more SACCOs in Uganda. The purpose of this study is to establish corporate governance and risk management practices on the operations of SACCO’s and to make suggestions on improving corporate governance and risk management process of SACCO’s in Wakiso district. The study is cross sectional and used descriptive research survey design, which includes surveys and fact-finding enquiries of different kinds. To undertake this study, a sample of 50 respondents was drawn from 10 SACCOs in Wakiso district and a questionnaire distributed to each of the SACCOs, collected and analyzed the study mainly using the primary data that was collected by use of self-administered questionnaires. The data was coded in SPSS Vs20 through which analysis was conducted and the results of the findings were presented in tabular form to reflect descriptive analysis. Lack of Corporate governance best practices has been found to be strongly associated with persistent poor performance of SACCOs that has caused most SACCO’s not to achieve their desired objectives. Good governance can improve the performance of a SACCO and help it achieve operational and financial self-sustainability for its long term survival as opposed to poor corporate governance that will led to SACCO mismanagement and their eventual collapse. The study recommended that SACCOs need to put up strong credit controls so as to lower the credit risks in their organization. The boards should establish functional subcommittee of the boards and disclose financial statement to members during the AGM. SACCO’s should maintain internal controls environment required to manage and control risks and develop a set of policy manuals to address all aspects of its operational and business risks. The SACCO should also undertake awareness campaign in order to create awareness among their members on their rights and the institution structure, as well as encourage active members’ participation in activities of the SACCO for instance voting in the AGM.
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