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Specifically, this study was anchored on four specific objectives which sought towards the efficiency of SACCOs loan procedures and criteria, the magnitude of loan defaults and default rates, the factors contributing to loan defaults, and the efficiency of the loan recovery procedures among the sampled SACCOs in Kibaha Town Council. From a methodological point of view, the study employed simple random and purposive sampling techniques, while relying on a sample of 105 respondents from five selected SACCOs operating in Kibaha Town Council. Of these 100 respondents, who were SACCOs clients, were administered with a semi-structured questionnaire, while the remaining five (5), who comprised of SACCOs personnel, were interviewed using key informant interviews. In addition, the researcher undertook a rigorous review of various documents relating to loan repayment and default among financial institutions. The researcher also went through various financial statements of the sampled SACCOs. Findings indicated that majority of the respondents said the procedures for seeking a loan from the SACCOS were not cumbersome at all. In terms of the loan appraisal processes, the majority of the respondents indicated that loan officers do not necessarily endeavour to cross-check background of borrowers’ information loan appraisal process is not strict not difficult. It was indicated that majority of the respondents have always defaulted on their loan repayment. It was indicated that majority of the respondents there was a poor appraisal process of the loan applicants. Lastly, for the objective, the findings indicate that majority of the respondents indicated that the loan repayment procedures among the sampled SACCOS were not at all efficient, followed by a few who said the procedures were somewhat efficient. All in all, the study highlighted the fact that the loan recovery procedures among the SACCOS are very poor, and this has partly led to the high rates of loan default among the borrowers. It was recommended that the government needs to intervene by coming up with strict measures of enforcing loan repayment mechanisms. Also, the SACCOs need to reconsider train their staffs on loan application period, to loan appraisal, loan disbursements, supervision of borrowers and loan repayments. |
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