Abstract:
The paper assessed the determinants of Saving and Credit Cooperative
Societies (SACCOS) policies on financial sustainability, with evidence
from registered SACCOS in Hai District, Tanzania. Specifically, the study examined
the influence of credit management policies on financial sustainability, determined
the management of loan defaulters towards financial sustainability, and examined the
influence of membership enrollment policies on financial sustainability. The paper is
guided by three theories, i.e., the Life Cycle Theory (LCT), the Profit-Incentive
Theory (PIT) Agency Theory. The study adopted a descriptive research design
complemented by a case study research design. The sample size of the study was 138
respondents. The study found that loan repayment terms and conditions are critical
factors in ensuring the financial sustainability of SACCOS. Additionally, monitoring
and evaluation are critical components of effective loan management, as justified by
a significant majority of respondents. Further, the essence of SACCOS limiting loan
amounts to collateral value scored the highest estimate and was statistically
significant. The study concluded that credit management, loan defaulter management,
and membership enrollment can enhance SACCOS' financial sustainability with
varying variables. The study recommends that SACCOS should regularly provide
training to members on credit issues. Further, SACCOS should continuously monitor
the effectiveness of recovery policies by properly elaborating on the loan
categorization report based on the time of payment; penalize delinquent loans, and
ensure zero tolerance for members with loans in arrears.
