Abstract:
The primary goal of this research is to look into the factors that influence the growth of SACCOs
in Ambo. The study used a quantitative research method and an explanatory research design.
Purposive sampling was used to select three SACCOs from among 4 SACCOs in Ambo town. the
146 ASCCOU affiliated members was selected among 2226 members. The data used in the
analysis includes secondary data, as well as a panel data regression model. The major
determinant factors that affect SACCOs growth by using loan size as a measurement are the
amount of saving, the level of interest rate on saving, and the amount of dividend paid to
members, all of which have a positive relationship and are statistically significant, while the
other determinants that have a positive relationship but are statistically insignificant are the age
of SACCOs, income per capital, and maturity date. On the other hand, when the number of
SACCOs members is taken into account, the amount of saving and income per capital have a
positive relationship and have a Significant impact on SACCOs growth. Furthermore, the level
of interest rate on borrowing is the most important determinant factor that has a negative impact
on loan size and is statistically significant. In the same way MEMB is affected negatively by LIB
and LIS negatively but its significance level is weak. Therefore the researcher recommends
SACCOs should give high attention in attracting members to increase their source of fund by
providing awareness about the benefit of joining SACCOs, by using social medias, providing
training to clients, by distributing brochure for clients, if fund is available should encourage
members to take loan to increase dividend for idle funds, should charge compatible interest rate
on loan to members to attract members, should increase the duration of repayment of loan and
finally Federal cooperatives agency should pay attention in continuous supervision of SACCOs.
