Effect of Microfinance Institution Capability on Employee Savings Improvement: A Case of Selected SACCOS in Bukoba.

Massay, Eustaki Daniel (2023) Effect of Microfinance Institution Capability on Employee Savings Improvement: A Case of Selected SACCOS in Bukoba. Masters thesis, The Open University of Tanzania.

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Abstract

The research aimed to investigate how the capabilities of microfinance institutions influence the enhancement of employee savings. The study was carried out in chosen Savings and Credit Cooperative Societies (Saccos) in Bukoba. In particular, it focused on assessing the impact of financial inclusion provided by microfinance institutions on the improvement of employee savings, identifying the criteria employees need to fulfil to access services from these institutions, and analyzing the influence of training provided by microfinance institutions on the enhancement of savings. A quantitative research approach was used and a survey research design was used. The study is guided by the pecking order Theory. Questionnaires were used to collect data from 100 respondents from a total of 147 Saccos beneficiaries. Descriptive statistics, correlation and regression analysis were used to analyze data. The study found that financial inclusion is significantly and positively related to employee savings improvement, the condition to be met by employees to access microfinance institution services was statistically and positively correlated to saving improvement. The study concludes that microfinance institutions have to strengthen financial service provision capacities to equip employees with savings improvement. It also concluded that financial training needs to be provided before the commencement of business to increase employee savings capability. Ultimately the study recommends that employees should request Saccos membership and borrow loans with favorable conditions to be invested in business to increase savings capability. There is a need for policy makers to ensure that guiding rules and regulations of microfinance institutions should be promising for loan beneficiaries to provide them with the opportunity to access microfinance financial services. Keywords: Financial inclusion, training, savings improvement, microfinance institutions

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