Analysis of Financial Performance and Sustainability of Microfinance Institutions in Tanzania: A Case of selected SACCOS in Mtwara Municipal

Malua, Lucas Yohana (2013) Analysis of Financial Performance and Sustainability of Microfinance Institutions in Tanzania: A Case of selected SACCOS in Mtwara Municipal. Masters thesis, The Open University of Tanzania.

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Abstract

Achieving performances and financial sustainability is crucial for microfinance institutions. This does not assure MFIs existence but also guarantees continual provision of financial services to the poor. The overall objective of this study was to examine the financial performance of Saving and Credit Cooperative Societies (SACCOS) in achieving financial sustainability. Four variables, namely Savings mobilization pattern, levels of interest charged on loans, Loan portfolio looking at loan size, repayment terms and pattern, and institutional capacity were used to measure the sustainability and performance of Saving and Credit Cooperative Societies. The study involved 15 SACCOS in Mtwara Municipal. Primary data was collected using both questionnaire (Appendix 1) and semi structures interview. Apart from questionnaires and semi structured interview questions, another method that was used in data collection was documentation. The finding implies that savings mobilization indicated positive influence on the sustainability of SACCOS. SACCOS has managed to build up its lending base by influencing savings. The existing policy that the individual can borrow the maximum amount of twice the savings level attracts saving rather than interest on savings. The study recommends that the MFIs should continue to build their lending base through savings mobilization. This has been a major success factors to SACCOS.

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