Understanding Factors Impacting to Low Members’ Savings among Savings and Credit Co-operative Societies (SACCOS)

Abstract

he functionality of the Savings and Credit Cooperative Societies (SACCOS) sorely depends to members’ savings. Specifically, this study aimed to determine SACCOS’ members saving capacity and to identify factors leading to low members’ savings. Ninety SACCOS members were selected and used in this study. Data were collected using structured questionnaire, checklist of interview and documentary review. The collected data was analyzed descriptively whereby percentages and multiple responses analysis were computed. The study findings revealed that SACCOS members in Kwimba District have low saving capacity of below 10,000TZS per month. Among the revealed factors leading to low member savings included; un-payment of interest to members’ savings, few sources of income among members and lack of faith with SACCOS as a strong financial institution hence members fear of losing their money when they consider depositing to SACCOS. Stiff competition from other competitors that offer loans without savings was also among the factors leading to low member savings. The study concludes that low member savings among SACCOS members in Kwimba District is sorely associated with; demographic characteristics of individual SACCOS member, SACCOS as an institution and external environment particularly SACCOS competitors. The study recommends that; SACCOS management should work upon the identified hindrances of low member savings in order to improve member savings capacity and the entire functionability of the SACCOS in Rural Kwimba District. The study as benefited the SACCOS management to strategize on how to increase members' savings capacity hence improve liquidity and functionality of the entire SACCOS.