Variables for Modeling SACCOS in Tanzania

Abstract

In order to publish a quality article in a journal, an author must understand how to apply the econometric skills to construct models which explain the relationship between the independent and dependent variables. This study used the literature review to examine the variables used to establish relationship between the independent and dependent variables in Savings and Credits Cooperative Societies (SACCOS) in Tanzania. The findings reveal that currently few studies have been conducted to model SACCOS in Tanzania and scholars mostly applied the regression models. Moreover, the findings show that most scholars have empirically studied the outreach and sustainability of SACCOS in Tanzania compared to other topics. The studies also show that most of issues have not been addressed in the research. This study recommends that financial management researchers should learn econometrics so that they might gain skills which might help them to model SACCOS and other MFIs. Moreover, topics which were not addressed in research should be given priority by the researchers in Tanzania and in other countries.

Measuring the technical efficiency of cooperative societies in Kuwait

“…Magali and Pastory () and Magali () assessed the TE of rural Savings and Credit Cooperative Societies (SACCOs) in Tanzania and found that higher costs and small size were the primary determinants of inefficiency. They reported that the TE of SACCOs varied both across and within regions.…”

“…Ifenkwe (2007) compared the performance of Nigerian farming, trading, and agro-industrial cooperative societies and found that agro-industrial groups were the most efficient and that trading groups were the least efficient coop type. Magali and Pastory (2013) and Magali (2014) and recommended that small firms should increase their size and managerial capacity to enhance efficiency. Lakew et al (2014) examined the financial performance of multipurpose cooperative unions in the Tigray Region of Ethiopia.…”

Determinants of Technical Inefficiency of Saccos in Kenya: A Net Operating Cash Flows Output Slack Analysis

“…Further, these studies are basically based on absolute performance measures (such as increase in loans, increase in membership levels of delinquent loans, and growth in number of co-operatives) and interview responses from the stakeholders. The situation is slowly changing as other research are now coming up especially based on ratios, efficiency and multiple regression such as (Tesfamariam et al, 2013;Kivuvo and Olweny, 2014;Mirie, 2014;Marwa and Aziakpono, 2015).…”

“…Other discussed models relevant to this research are the financial institutions' prudential monitoring standards. However, the regulator of deposit taking Saccos in Kenya advocates for the adoption of Camels Prudential Reporting Standards (Kivuvo and Olweny, 2014). Further, this study utilized the BCC analysis based on inefficient results of DEA as dependent variables (Banker et al, 1984) which were used to identify the variables that best measure the pure technical inefficiency of the Saccos by running a truncated-normal regression given a census of 46 deposit taking Saccos that had by then attained the FOSA operation requirements.…”

“…Kenya Saccos have high urge for shifting from savings and credit co-operatives to credit and savings cooperatives that is, they actually bend towards sourcing for external funds than relying on equity funding. Capital inadequacy and insolvency risks are key factors influencing performance of deposit taking Saccos (or FOSA) in Kenya (Kivuvo and Olweny, 2014). This behavior scores them well as candidates of capital rationing.…”