Credit risk management and financial performance of Saccos in Bushenyi, Uganda: a case study of Bushenyi peoples’ SACCO
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Date
2019-03
Authors
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Publisher
Kampala International University: College of Economics and Management
Abstract
The purpose of this study was to investigate the effect of credit risk management and financial performance of Bushenyi peoples' SACCO in Uganda. The study was based on the following 4 objectives; (i) to assess the effect of credit terms on financial performance of Bushenyi peoples' SACCO in Uganda, (ii) to determine the effect of credit standards on financial performance of Bushenyi peoples’ SACCO in Uganda, (iii) to determine the relationship between credit policy and financial performance of Bushenyi peoples’ SACCO in Uganda and (iv) to establish the effect of collection policy on financial performance of Bushenyi peoples’ SACCO in Uganda. The study adopted descriptive survey design and a sample size of 113 respondents were used for this study. The findings revealed that; credit terms is positively (13=0.538) and statistically and significantly (p-value=0.000) affect financial performance of Bushenyi peoples’ SACCO; credit standards is negatively (13=~0.O01) and does not statistically and significantly (p value=0.990) affect financial performance of Bushenyi peoples’ SACCO; credit policy is positively (13=0.773) and statistically and significantly (p-value=O.000) affect financial performance of Bushenyi peoples’ SACCO and credit collection policy is positively (13=0.307) and statistically and significantly (p-value=0.000) affect financial performance of Bushenyi peoples’ SACCO. The study concluded that; credit terms have a positive significant effect on financial performance of Bushenyi peoples’ SACCO; credit standards have a negative significant effect on financial performance of Bushenyi peoples’ SACCO; credit policy have a positive significant effect on financial performance of Bushenyi peoples’ SACCO and credit collection policy have a positive significant effect on financial performance of Bushenyi peoples’ SACCO. The study recommended that; Bushenyi peoples’ SACCO should normally assess credit history and income of the customer before giving credit to them, always analyze past borrowers; have effective penalties put on default and late repayment; use auctioneers to recover loans and should normally sale of the property to recover loans and Bushenyi peoples’ SACCO should normally assess market conditions risk of a borrower to limit loan.
Description
A research report submitted to the College of Economics and Management in partial fulfillment of the requirement for the Award of Bachelor’s Degree in Business Administration Finance and Banking of Kampala International University Kampala, Uganda
Keywords
Credit risk management, Financial performance, SACCO in Bushenyi, Uganda, Bushenyi peoples’ SACCO