Indicative Factors for SACCOs Failure in Tanzania


  • Cosmas Magashi Department of Information Technology, System Development, and Management (ITSDM), Nelson Mandela African Institution of Science and Technology (NM-AIST), Tanzania
  • Anael Sam Department of Information Technology, System Development, and Management (ITSDM), Nelson Mandela African Institution of Science and Technology (NM-AIST), Tanzania
  • John Agbinya School of Information Technology and Engineering, Melbourne Institute of Technology (MIT), Australia
  • Jimmy Mbelwa Department of Computer Science and Engineering, University of Dar es Salaam (UDSM), Tanzania
Volume: 13 | Issue: 4 | Pages: 11177-11181 | August 2023 |


SACCOs are viewed as a feasible opportunity toward financial inclusion in an economy where most of the citizens are poor, as they are very essential for the socio-economic development of members, the community, and the world at large. However, SACCOs sometimes do not realize the expected socio-economic potential, especially when they fail. This study aimed to comprehensively assess financial and non-financial factors, at institutional and personal levels, that contribute to the failure of SACCOS in Tanzania. The data were collected using a questionnaire on 5,000 members of SACCOs, obtained using stratified random sampling. Data collected were analyzed using descriptive statistics and binary logistic regression. The findings showed that both financial and non-financial factors, at personal and institutional levels, had a statistically significant and positive relationship with the failure of SACCOs. Therefore, the performance of SACCOs and other Microfinance Financial Institutions (MFIs) should be addressed from a comprehensive view of both financial and non-financial factors, at personal or institutional levels. In other words, the failure of MFIs should be addressed from a holistic point of view.


SACCOs failure, financial factors, non-financial factors


Download data is not yet available.


M. F. Mubarak, F. A. Shaikh, M. Mubarik, K. A. Samo, and S. Mastoi, "The Impact of Digital Transformation on Business Performance: A Study of Pakistani SMEs," Engineering, Technology & Applied Science Research, vol. 9, no. 6, pp. 5056–5061, Dec. 2019.

B. O. Ndiege, L. Mataba, M. Msonganzila, and K. L. Nzilano, "The link between financial performance and loan repayment management in Tanzanian SACCOS," African Journal of Business Management, vol. 10, no. 4, pp. 89–97, Feb. 2016.

N. Marwa and M. Aziakpono, "Technical and Scale Efficiency of Tanzanian Saving and Credit Cooperatives," The Journal of Developing Areas, vol. 50, no. 1, pp. 29–46, 2016.

J. K. Kamau and D. W. Guyo, "The Effects of SACCOS’ Regulations on the Performance of Savings and Credit Societies (SACCOS) in Kenya: a Case of Saccos in Nairobi," International Journal of Business Management & Finance, vol. 1, no. 8, pp. 121–131, Apr. 2017.

M. T. Pasara, A. Makochekanwa, and S. H. Dunga, "The Role of Savings and Credit Cooperatives (SACCOs) on Financial Inclusion in Zimbabwe," Eurasian Journal of Business and Management, vol. 9, no. 1, pp. 47–60, 2021.

P. Anania and A. Gikuri, "SACCOS’ and Members’ Expectations: Factors Affecting SACCOS Capacity to Meet Members’ Expectations," presented at the Co-operative Research Workshop, Moshi, Tanzania, Mar. 2015.

Mjatta, G.T, Akarro, and R.R.J, "Traits Associated with the Success or Failure of Emerging SACCOS in Tanzania : A Case of Four Regions in Tanzania Mainland," Global Journal of Commerce & Management Perspective, vol. 5, no. 4, pp. 29–38, 2016.

"SACCOS loan portfolio increases."

E. A. L. Mumanyi, "Challenges and opportunities facing SACCOs in the current devolved system of government of Kenya: A case study of Mombasa County," International Journal of Social Sciences and Entrepreneurship, vol. 1, no. 9, pp. 288–314, 2014.

N. M. Duncan and D. A. Njeru, "Effect of Loan Repayment on Financial Performance of Deposit Taking SACCOs in Mount Kenya Region," International Journal of Innovation and Applied Studies, vol. 10, no. 4, pp. 1238–1244, 2015.

T. M. Mallya, "The Role of SACCOS on Improving Livelihood of Clients in Moshi Rural District.," MSc Thesis, The Open University of Tanzania, 2020.

P. Mphaka, "Strategies for Reducing Microfinance Loan Default in Low-Income Markets," Ph.D. dissertation, Walden University, 2017.

G. G. Jote, "Determinants of Loan Repayment: The Case of Microfinance Institutions in Gedeo Zone, SNNPRS, Ethiopia," Universal Journal of Accounting and Finance, vol. 6, no. 3, pp. 108–122, Aug. 2018.

L. Mapunda, "Factors Affecting Loan Repayments Efficiency Among SACCOs Borrowers in Tanzania: a Case of Selected SACCOs in Kibaha Town Council," MSc Thesis, Mzumbe University, 2019.

M. Melese and M. Asfaw, "Determinants of Loan Repayment Performance of Omo Microfinance Institution: In the Case of Mizan Aman Town, Southwest Ethiopia," Research Journal of Business Management, vol. 14, no. 1, pp. 7–14, Dec. 2019.

R. Rangelova, "Current-Account Imbalances and Economic Growth During the 2008-2009 Financial Crisis: An Empirical Analysis," Contemporary Economics, vol. 8, no. 2, pp. 123–136, Jun. 2014.

L. Auronen, "Asymmetric Information: Theory and Applications," Tu-91.167 Seminar in Strategy and International Business, 2003.

E. Richard, "Factors that Cause Non–Performing Loans in Commercial Banks in Tanzania and Strategies to Resolve Them," Journal of Management Policy and Practice, vol. 12, no. 7, pp. 104–116, 2011.

"SACCOs Industries in Emerging Economies. A Comparative Study into Effectiveness as a tool of Poverty Reduction," Journal of Accounting, Ethics and Public Policy, vol. 15, pp. 55–75, 2014.

A. Bryman, Social Research Methods. Oxford, UK: Oxford University Press, 2001.

R. K. Yin, Case Study Research: Design and Methods, 5th ed. Los Angeles, CA, USA: SAGE Publications, Inc, 2013.

M. Saunders, P. Lewis, and A. Thornhill, Research Methods for Business Students. Harlow, UK: Pearson Education, 2009.

C. R. Kothari, "Sample Size Determination," in Research Methodology: Methods and Techniques, New Age International, 2004, pp. 74–81.

J. Nunnally, Psychometric Theory, 2nd ed. New York, NY, USA: McGraw Hill, 1978.

B. G. Tabachnick and L. S. Fidell, Using Multivariate Statistics, 5th ed. Boston, MA, USA: Pearson College Div, 2006.

J. Pallant, SPSS Survival Manual: A step by step guide to data analysis using IBM SPSS, 7th ed. London, UK: Routledge, 2020.

F. A. Shaikh, "Financial Mismanagement: A Leading Cause of Time and Cost Overrun in Mega Construction Projects in Pakistan," Engineering, Technology & Applied Science Research, vol. 10, no. 1, pp. 5247–5250, Feb. 2020.

M. A. Munir, M. A. Zaheer, M. Haider, M. Z. Rafique, M. A. Rasool, and M. S. Amjad, "Problems and Barriers Affecting Total Productive Maintenance Implementation," Engineering, Technology & Applied Science Research, vol. 9, no. 5, pp. 4818–4823, Oct. 2019.


How to Cite

C. Magashi, A. Sam, J. Agbinya, and J. Mbelwa, “Indicative Factors for SACCOs Failure in Tanzania”, Eng. Technol. Appl. Sci. Res., vol. 13, no. 4, pp. 11177–11181, Aug. 2023.


Abstract Views: 245
PDF Downloads: 183

Metrics Information

Most read articles by the same author(s)