Performance of Rescue Package Beneficiaries and Its Determinants: ‘The case Study of CRDB Bank Public Limited Company

Luswaga, Makoye (2013) Performance of Rescue Package Beneficiaries and Its Determinants: ‘The case Study of CRDB Bank Public Limited Company. Masters thesis, The Open University of Tanzania.

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Abstract

The study’s focus was on assessing performance of the beneficiaries of the rescue package (cotton and coffee traders’) following the Global Financial Crisis (GFC) that occurred in 2008. It aimed at analyzing the characteristics of rescue package beneficiaries, assessing their performance after they had received the rescue package and identifying factors influencing such performance. Data were collected by administering 74 questionnaires to sampled beneficiaries in Ruvuma, Mbeya, Mwanza, Mara and Shinyanga. Only 51 useful questionnaires were returned. Data were inputted in SPSS Software. The analysis involved use of cross tabulation techniques to analyze the key characteristics of rescue package beneficiaries and assessing their performance after they had received the rescue package. Also identifying the factors that influenced loan repayment performance and access loans, mean scores from 5 points likert scale types of statement were computed descriptively across respondents and compared statistically between coffee and cotton traders using independent samples t-test technique. Results show that 31.3% of the rescue package beneficiaries repaid their loans fully, 78.4% accessed loans subsequently; 52.9% experienced increase in sales varying from 1% to 100%, 39.2% increased staffing by between 1% to 100%; and 74.5% were able to survive and continue trade in the two crops. There were notable differences in all performance measurements between coffee and cotton traders. Multiple borrowing behaviour of the traders, political interference, interest rate on loans and crop market were found to be important determinants of rescue package beneficiaries’ subsequently loan repayment performance. Mean scores for multiple borrowing and political interference for coffee traders were statistically significantly higher than those of cotton traders. Moreover, although crop prices and crop markets had the lowest mean scores, those for coffee traders were statistically higher than those of cotton traders and were significant. Result also show that bank procedures, timeliness disbursement, bank policies, timeliness of disbursement of rescue package payments and traders relationship with the bank were important factors for subsequent access to loans. Mean scores for all these factors were lower and statistically insignificant for coffee traders except for the traders’ relationship with the bank in which the mean score for coffee traders was significantly higher than that of cotton traders.

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