CREDIT POLICIES AND PERFORMANCE OF SACCOs IN SERERE DISTRICT. A CASE STUDY OF AMORU VILLAGE SACCO OF KADUNGULU SUB COUNTY IN SERERE DISTRICT

ABSTRACT

The study examined credit policy and performance of savings and credit, Amoru Village

SACCO being the case study.

The study based on three objectives namely; to find out the effects of credit terms and standards

on the performance of SACCOs at Kadungulu sub county Serere district, to determine the effects

of collection efforts applied on performance of SACCOs at Amoru village Savings and Credit

Cooperatives (SACCOS) in Kadungulu sub county, Serere District and to establish the effects of

collection period on the performance of Amoru village Savings and Credit Cooperatives

(SACCOS) in Serere District.

The researcher used descriptive research design in investigating the relationship between Credit

policy and the performance of SACCOs. The design was preferred because it entails complete

description of the situation, thus limiting the level of biasness in the collection of data and

eventual reduction of errors in interpreting the data collected. Descriptive research allowed the

researcher to evaluate the states of a defined population with respect to certain variables.

The study found out that good credit terms have a positive impact on the performance of the

SACCO since the clients will be borrowing funds and paying them back in time, there was a high

positive correlation between the credit terms and loan performance. The study also found out that

good credit standards can save the SACCO from cases like loan defaulting by the clients, hence

boosting the financial performance of the SACCO. Collection policy also helps a lot in tracking

the loans from the clients and ensuring that the loans are paid back on time. This has improved

on the performance of Arnoru village SACCO.

The study concluded that credit terms affect performance of Amoru village SACCO as the

clients can afford the interest rates charged by this SACCO. Collection policy influences the

performance of the SACCO.

The study recommended that the SACCO should apply lenient collection methods so that it does

not scare away potential borrowers, a further study should be carried out to investigate the

challenges facing SACCOs in successfully implementing financial management practices, the

study also recommended a further study on the impact of SACCO regulatory bodies on non~

performing loans in SACCOs.

xi

CHAPTER ONE