Savings and Credit Cooperatives’ Financial Services and the Growth of Members’ Enterprises in Luweero District in Uganda

Abstract

SACCO financial services are conceptualized as resource based values needed to enable members’ enterprises to achieve growth. SACCO financial resources supplement members’ equity which enhances growth. The study intention was to explore the relationship between SACCO financial services and the growth of members’ enterprises in Uganda. The study was guided by two objectives: to examine the relationship between saving services and growth of members’ enterprises; and to establish the relationship between credit services and growth of members’ enterprises in Uganda. This study adopted a mixed method approach and unit of analysis was SACCOs and members enterprises. The sample size for qualitative interviews was twenty-nine (29) respondents and analyzed using NVIVO software. The sample size for the quantitative survey was two hundred and ten (210) respondents and analyzed using SPSS version 20. The interviews revealed that savings SACCO financial services relieve enterprises from credit dependence, attract interest and facilitate investment which enhances growth. It was established that credits are relevant in business although they increase the financial cost which reduces profits and retards growth. The quantitative results from descriptive analysis indicated that respondents agreed with access to SACCO financial services mean value of 4.00; mediation tests carried out using structural equation with Sobel’s test indicated significant positive relationships between predictor and outcome variables; correlation analysis indicated that SACCO financial services had positive statistic significant relationship on growth of members’ enterprises. Government policies and politics as mediating variables had a positive statistic significant relationship on growth. Regression analysis established that only saving SACCO financial services predict growth of members’ enterprises at 99% level, thus confirming to directional hypothesis 1 and all variables explain 28.1% variation on growth of members’ enterprises (R Square of 0.281). However, credit financial services and government policies did not predict growth. It was discovered that the Resource Based View theory was applicable in the support for growth of SACCO Members enterprises. It was concluded that SACCO managers and other stakeholders should train and encourage members to save for their enterprises to in order to support growth.