The Relationship between Member Financial Literacy and Loan Repayment in Savings and Credit Co-Operative Societies in Uasin-Gishu County, Kenya (Published)
Financial literacy is the possession of knowledge, skills and attitudes that enable an individual to use money effectively by making sound informed financial decisions, it plays a critical role in Savings and Credit Co-operative Societies (SACCOS). SACCOS are vital financial institutions that encourage thrift to give loans to members; however, Loan Repayment (LR) poses a threat to SACCOS’ sustainability. The main objective of this study was to examine the relationship between Member Financial Literacy (MFL) and LR in SACCOS. Specifically, the study – (i) assessed the MFL in SACCOS (ii) determined the influence of MFL in SACCOS on LR. The study adopted cross-sectional research design whereby 384 members and 147 SACCOS were drawn using simple random sampling techniques. A survey, in-depth interview and Focus Group Discussions (FGDs) were data collection methods. Binary logistic regression was used to analyse quantitative data while qualitative data were analysed using content analysis technique. Results revealed that MFL in SACCOS were low. The MFL were on budgeting, savings, debt management, and bookkeeping. Other indicators of MFL were financial capability, awareness and goal. Attitudes, beliefs and perceived power shaped financial behavior increasing the chances of member LR. The study concludes that MFL was crucial on determining LR. It recommends SACCOS’ board members and managers to provide education on MFL in SACCOS before disbursing any loan and after to improve LR.
Loan Repayment Behavior among Member of Farmers Multipurpose Cooperative Societies in Anambra State (Published)
This study examined the loan repayment behavior of farmers multipurpose cooperative societies in Anambra State. The famers are poor and cannot raise the money needed for farming and when they obtain loan repayment is usually poor. The study specifically examined the range of amount of loan applied for, amount approved, amount disbursed and repaid by the cooperative farmers. It investigated the socioeconomic factors affecting the farmers’ credit repayment ability and ascertained major problems affecting the farmers in loan repayment using t-test statistics and a multiple econometric model of the Ordinary Least Square (OLS). Findings revealed that there is a significant difference between the amount of loan received and amount repaid by the cooperative farmers. The joint effect of the explanatory variable in the model account for 91.9% of the variations in the factors affecting the farmers’ credit repayment ability. Four coefficients (educational qualification, farm size, loan application cost, and collateral value) are significant. Age, membership duration and income of the farmers are not significant but they show a positive relationship with loan repayment. Factors affecting the farmers’ credit repayment ability are significant at 0.000 significant level. The study therefore recommends among others that cooperative societies should endeavour to educate the farmers on financial discipline and management because it has proven to significantly influence loan repayment. Lending institutions should ensure that whoever they are lending to meets a minimum threshold in asset value before loans are accessed. This will help to reduce defaulters.