Credit Risk Management and Financial Performance of Saccos Case Study: Kyazanga Kwegatta Sacco

Abstract

The study focused on the effect of credit risk management and financial performance of SACCOs. The study established the relationship between credit risk assessment affect financial performance of SACCOs, credit policies and financial performance of SACCOs and credit monitoring and financial performance of SACCOs. The study used a case study design and the study focused on Kyazanga Kwegaatta micro finance. The population of the study was 65 respondents and the sample size was 56 although actual participants were 48. The study used both qualitative and quantitative research approaches for data collection. The findings indicated that respondents agreed that borrowers have integrity, responsibility and credit worthiness. The field data collected indicated that respondents were in support of the idea that the loan portfolio is put under consideration. The findings revealed that respondents were in support that there is adequate system for monitoring and reporting risk exposures. The findings revealed that respondents were in support of the view that the firm has credit terms and credit standards. The study concludes that respondents agreed that borrowers have integrity, responsibility and credit worthiness. The study concludes that respondents were in support of the idea that the loan portfolio is put under consideration. The study concludes that respondents were in support that there is adequate system for monitoring and reporting risk exposures. The study concludes that respondents were in support of the view that the firm has credit terms and credit standards. The study therefore the study recommends that the firm should assess the character, integrity, responsibility and credit worthiness of a client. The recommends that management should put into consideration loan portfolio and the repayment capacity of a borrower should be assessed. The researcher recommends that organization should improve on the quality of credit terms and credit standards. The study recommends that management should consider adequate system for monitoring and reporting risk exposures which shall help a firm to evaluate the level and sensitivity of credit risk.

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