Impact of credit policy management on performance of microfinance institutions a case study of kitgum sacco

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Kampala International University, College of Economics and Management
The purpose of the study was to establish the effectiveness of credit policy management and performance in kitgum saving cooperative and credit society (Kitgum SACCO) and to establish the extent to which management contributes to the successful operation of the existing credit policy in kitgum district. The study sample size was 25 respondents from kitgum sacco. The study was carried out using questionnaires as a method of data collection. The secondary data used were internal documents such as audit reports 2008 -2009, files, kitgum Saccos' strategies plan 2005 - 2012. Objectives of the study • To evaluate the effectiveness of the credit policies on performance of microfinance institutions of kitgum saccos. • To evaluate the relationship between management and performance of kitgum saccos • To assess the causes of unethical behaviors of the credit officials ofkitgum sacco. From the findings, the main causes of deteriorating performance are; inefficiency of some credit policy variables, inadequate credit policies and improper management. However the major weakness in credit management of kitgum sacco is reluctance to make follow up in after the expiration of the period. Uncreditworthiness of some credit officials by writing off debts as bad and yet actually they have received payments. Inefficiency of control systems put in place and failure to implement the appropriate credit policy, resulting into low revenue collections. 5 Recommendation In order to be able to check on losses and defaults in kitgum SACCO and also have a more efficient credit policy management. The researcher came up with the following views: Kitgum SACCO needs to reassess the existing credit policy and if necessary to adopt those policies which can enhance its performance. Further training should be organized for credit officers to ensure that they update knowledge as regards to debt collections and credit management. Frequent evaluation of the credit official should be carried out to eliminate the inactive and untrustworthy officials.
A research report submitted to College of Economics and Management Kampala International University in partial fulfillment for award of Bachelor Degree of Commerce
credit, policy management, microfinance institutions, kitgum sacco