Comparative Analysis of Financial Performance of Saving and Credit Cooperative Societies In Kisarawe District

Sangali, Peter Daniel (2013) Comparative Analysis of Financial Performance of Saving and Credit Cooperative Societies In Kisarawe District. Masters thesis, The Open University of Tanzania.

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Abstract

The purpose of this study was to compare the financial performance of employee and community based saving and credit cooperatives societies in Kisarawe district. Indicators of financial performance were size of a SACCO, capital, operating expenses, liquidity, and loan to members ratios. The population was a sample of eight SACCOs operating in Kisarawe district; three of them are employee-based while the remaining five are community-based SACCOs. The researcher employed secondary data method of data collection. Secondary data included annual SACCOs’ reports and only audited financial statements for individual SACCOs for the period 2008-2011 were used. The findings of the study revealed that E-SACCOs exploit more efficiently economies of scale than C-SACCOs that is the former enjoy more cost advantage which arises with increased output of total assets than the later and thus E-SACCOs perform better financially than C-SACCOs. E-SACCOs have smaller amount of cash to lend to members, that is smaller working capital than CSACCOs and therefore the former perform better financially than the later. CSACCOs have a better sound capital position and are able to pursue business opportunities more effectively and have more flexibility to deal with problems arising from unexpected losses, thus achieving more increased profitability than ESACCOs. Therefore E-SACCOs performed better financially than C-SACCOs in terms of size of a SACCO, operating expenses and loan to members, but C-SACCOs performed better financially than E-SACCOs in terms of liquid investment and capitalization.

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