Outreach and Sustainability of Savings and Credit Cooperative Organisations (SACCOs) in Uganda

Abstract

The study was aimed at investigating the relationship between outreach and sustainability of Savings and Credit Cooperative Associations (SACCOs) in Uganda. The research also determined the individual factors that influence outreach and sustainability. According to the Ministry of Trade and Commerce report 2018, there are over 10,000 SACCOs registered in central Uganda alone however, only 41% of these were still active by the end of 2018. This is an indication that Micro Finance Institutions (MFIs) do not remain operational for long and the reasons for closure are attributed to sustainability and outreach. The research revealed that sustainability is influenced by the number of borrowers as this provides more interest to the SACCOs hence increasing their profitability and boosting sustainability in the long run. Average loan size was seen to be a better indicator of outreach since it showed how the low income earners benefit from SACCO services. the study identified SACCO branch diversification to be an influencing factor to both sustainability and outreach. The increased number of branches brought services closer to the people hence increasing customers and income to the SACCOs. A positive correlation was revealed between sustainability and outreach.