The relationship between loan assessment and financial performance of SACCOs: Evidence from Uganda

Abstract

The study set out to examine the relationship between loan assessment and financial performance of SACCOs in Mbarara Municipality. The study adopted a non-experimental cross-sectional research design. The study was both descriptive and analytical in nature with a quantitative approach of data collection and analysis. The study gathered quantitative data from 109 participants using questionnaires. Quantitative data gathered using questionnaires was coded and entered into SPSS version 20 for analysis. The analysis was done and findings presented using descriptive statistics in form of frequencies, percentages, mean and standard deviations. Pearson correlation coefficient was utilized to ascertain the statistical significance between the independent and dependent variables. Findings from the study revealed that there is a strong positive relationship between loan assessment and financial performance of SACCOs (r=0.870**, p<0.000). The study concluded that loan assessment positively influences financial performance of SACCOs. The study recommends that SACCOs need to adopt well thought and efficient loan assessment strategies as means to improve their financial performance