Abstract:
The primary objective of this study was to identify and examine the determinants of
linkage banking between Savings and Credit Co-operative Societies (SACCOS) and
formal financial institutions such as commercial banks in Tanzania. It was thought that
this would assist in the understanding and facilitating of the financial linkages in the
country and thus expanding access to financial services.
The specific objectives of the study were to:
• Identify contributory factors to linkage banking between SACCOS and formal
financial institutions and their relationship;
• Identify motives that lead parties (SACCOS, commercial banks and other formal
institutions) to participate in the linkage banking relationship;
• Ascertain the effect of linkage banking on a SACCOS' savings growth and the
quality of its loan portfolio; and
• Ascertain the types of linkage banking practices undertaken in Tanzania. This study applied a combination of survey and case studies The adoption of a combined
approach of these two research designs was meant to mitigate the limits of any single approach.
With regard to surveys, the study involved collection of data from different groups that
included SACCOS, formal financial institutions, supervisors as well as regulators of financial
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services, SACCOS' unions or networks, and institutions/ projects/programmes involved in the
promotion, lending to and facilitation of SACCOS.
