Abstract:
This study analyzed the role of service quality in financial performance of selected
SACCOs in Moshi Municipality. Specifically, the study examined the financial
performance of SACCOs, identified factors that determines quality service of the
SACCOs, compared attitude of members on service quality in studied SACCOs,
determined the most important SERVIQUAL dimensions that matter most to SACCOs'
service and accessed the relationship between service quality and SACCOS financial
performance. 150 respondents were purposively sampled, whereby 140 were drawn
from ordinary members and 10 from board members. Quantitative and qualitative
techniques were used to analyze data. The study found that the financial performance
of SACCOs was good. WAZALENDO SACCOs had an efficiency score of 0.95; the
implication was that the SACCOs needed to reduce its inputs by 0.5%, to achieve 100%
efficiency. The factors that significantly affected service quality were experience, age,
education level and behaviour of the service provider, number of members, savings and
communication. Attitude of members on service quality in studied SACCOs was good,
the grand mean was greater than the accepted mean score of 2.50 indicating that the
items have been accepted by the respondents and believe that MRT and WAZALENDO
SACCOs offers quality service. With regard to most important service quality
dimension in SERVIQUAL dimensions, MRT members listed reliability dimension as
the most preferably while WAZALENDO SACCOs favoured tangible dimension.
Conceming the relationship between service quality and SACCOs performance the
study concluded that there was relation, but the strength of the relationship differs with
each dimension. The study recommended that SACCOs should observe the output with
a minimum input
