Loan Delinquency in Savings and Credit Co-operative Societies

Abstract

This study examined the causes of Loan delinquency in Savings and Credit Cooperatives in Lushoto District, taking Kumekucha Mwamko SACCOs and Lushoto Teachers' SACCOs as case studies. It was guided by three specific objectives which were: to identify types of loans accessed by SACCOs to examine the influence of members' personal profiles on loan repayment and to examine strategies adopted by SACCOs to minimize loan delinquency. The study used a case study research design. Purposive and stratified sampling procedures were adopted in selecting respondents and data were collected through closed and open-ended questionnaires, interview and documentary review. Quantitative and qualitative data were analyzed and tabulated by the use of tables and bar graphs. The study found out that members' profile had an influence on loan repayment. Also, loan delinquency was mainly caused by depressed business, unfavourable climatic condition and misallocation of loans. Based on the research findings, the study recommends members' training improper loan utilization and strong supervision on loans. The government also should provide sufficient, financial and human resources to the Co-operative Development Department so that it can extend its supportive roles to the SACCOs to improve its service delivery to members.