Determinants Of Saving And Credit Cooperatives (Saccos) Growth: (The Case Of Ambo Town)

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.