Factors Affecting Growth of Savings and Credit Cooperative Societies (SACCOS): A Case Study of Singida District Council in Tanzania

Microfinance Institutions (MFIs) including SACCOS are the financial services established for the specific target to enable community, particularly poor people to access the credit after being lack of access to formal banking and related financial services. Worldwide the sector started since the 1770s, in Tanzania it kicked-off in 1991 after the enactment of Banking and Financial Institutions Act (BFIA) and Savings and Credit Cooperative Societies (SACCOS) Act in 1991. Many of the studies on the impact of SACCOS showed that; SACCOS have significant impact to poverty alleviation as well as standard of living in the community all over the world (Cherotich, 2015). Even though the sector has positive impact to the well-being of the world community but many of the SACCOS had downswing and others had an upswing since its establishment, the reasons behind of its up and down swings were explored by this study. The research was conducted in Singida District Council in the year 2018 to assess the factors affecting the growth of SACCOS; the study comprised a sample size of 88 respondents from ten (10) SACCOS of Singida District Council of which both qualitative and quantitative data set were collected. The study employed the case study design method to assess the factors affecting the growth of SACCOS in Tanzania. Thus, the research treated SACCOS growth as dependent variable, whereas factors affecting growth of SACCOS were treated as independent variables. The study revealed that capacity in managing finances and loans, adhering to the financial policies and guidelines, competency of personnel, appropriate training to key staff, loan follow up, access of SACCOS members to business training, availability of technical support to SACCOS, availability of sources for business capital, level of knowledge on sustainability, risk management, training on challenges related to business competition, macroeconomic factors including inflation, financial sector reforms and development of microfinance policy were the key factors affecting the growth of SACCOS in Singida District Council. However; based on the findings of the study, researchers realized that many of the challenges affecting the growth of SACCOS are within the capacity of the SACCOS stakeholders. Hence, if all SACCOS stakeholders can play their roles effectively the sector can perform well because many of the factors affecting the performance of SACCOS are due to the lack of seriousness of the respective SACCOS stakeholders. Hence, based on the research findings, it was concluded that SACCOS played a significant role in improving livelihood of the poor people in the community through provision of microsavings, microcredit, microinsurance, microhousing, microleasing among others; though the SACCOS faced with many constraints as explored by the study.