Determinants of SACCOS’ Financial Sustainability in Ilala Municipality
A continuing problem facing SACCOS is how to attain financial sustainability. Different study has been conducted but no one conducted in Ilala Municipality. Identification of the determinants of SACCOS’ financial sustainability was not done. This study aimed to bridge this knowledge gap. The study used both qualitative and quantitative research methodology. Data was collected through questionnaires and interviews from respondents who selected through purposive and convenience sampling techniques. Collected data was analysed through SSPS software. The study found that portfolio at risk, the cost per borrower and operating self-sufficiency were among the major factors that determine financial sustainability of the surveyed SACCOS. The study noticed that majority of SACCOS have their portfolios at risk of default, while only few of them are close to being self sustaining operationally. However, this study strongly qualifies that the surveyed SACCOS are highly efficient in absolute terms because they spend below the African average cost per borrower. Other factors determining MFI sustainability were productivity and delinquency rate. This study makes contribution to the knowledge by recommends reduction of default in loan repayment by monitoring borrowers regularly so as to ensure that they use the loans they received for the agreed and intended objective. Moreover, relevant and comprehensive training should be provided to loan officers.
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