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| Loan Portfolio and Performance of Savings and Credit Cooperative Organisations (SACCOs) in Bungokho South County, Mbale District, Uganda
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Makhosi Robert Wambele, Dr. Edward Ssenyange,
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Abstract:
The study investigated the effect of loan portfolio on the performance of savings and credit cooperative organisations (SACCOs) in Bungokho South County, Mbale district, Uganda. Specifically; the study established the relationship between loan disbursement and performance, the relationship between sufficiency of Monitoring and Support to loan clients and performance of SACCOs and the relationship between loan recovery rate and performance of SACCOs in Bungokho South County, Mbale district. A descriptive correlational cross-sectional survey design was used and adopted qualitative and quantitative approaches. The study targeted a total population of 102 members from four (4) SACCOs in Bungokho South County and these were; Busiu SACCO, Busoba Epicenter SACCO, Mbale teachers' SACCO and Bungokho Fukilisa SACCO. By use of purposive and simple random sampling techniques, the sample size form the population of 100 was 80 respondents. The findings of the study were that; most SACCOs in the study area did not always have enough money to lend out. Clients were given loans according what they had saved and. SACCO staffs have been carrying out assessments before giving out loans to the respective clients. Majority of the SACCOs followed loan disbursement procedures and were giving loans according to the ability of the client to pay back. Most of the SACCOs in the study area took a minimum of one week to give out loans to their clients. Clients were aware of loan repayment period and loan repayment installments before taking on the loans. Majority of the loan officers hardly visited their loan clients to find out the progress of loan repayment. SACCO staffs had not been in the habit of supporting clients to pay their loans well. Loan officers were always taking a step of reminding the clients about their loan obligation. Loan officers had been giving reports on the financial states of their client loan clients had been vising their clients' businesses but other findings showed that SACCO staff were not effectively monitoring clients for loan repayment. As much as SACCOs in the study area would wish to increase their loan portfolio and consequent profits, they did not have enough funds for running the SACCO business. They were not getting enough interest from the loans given out and were not always having enough cash to meet their financial obligations. The study recommends that; Local government leadership should organize more training for SACCO staff in savings and credit management, Government to increase on funding to SACCOs and SACCO management to empower clients with business management skills.
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