Factors Affecting Financial Per`Formance Of Urban Saccos The Case Of Weltane Ambo Saccos Union Of West Shoa Zone, Oromia Regional State, Ethiopia

Abstract

The purpose of this study was to look into the factors that affect the financial performance of urban SACCOs in west shoa zone. The study's populations were SACCOs in West Shoa Zone with the sample frame consisting of primary SACCOs in Weltane Ambo SACCOs union. The study's sample size was 2 primary SACCOs, as determined by purposive sampling techniques. The research design was explanatory research design. The study used secondary data; secondary data was the main source of data for this research, which was collected from audit reports from 2017 to 2021G.C by using document review as a data collection instrument. SPSS Version 25 was used for secondary data analysis, and multiple regression analysis was used to establish the nature of the existing relationship between the research variable and content, and narrative analysis was used for qualitative data analysis. According to the findings, liquidity management in terms of current ratio and working capital turnover ratio, profitability of the society, asset quality in terms of total asset turnover ratio positively affect SACCO financial performance, whereas asset quality in terms of non-performing loan and non-earning asset, and leverage ratio in terms of debt-to-equity ratios negatively affect SACCO’s financial performance. The study recommended that SACCO’s management and officials should take good care of asset quality, should establish a strong system of documentation that will minimize defaults loans by customers.