Role of Credit Risk Management on Financial Performance of Saving and Credit Cooperatives in Ntungamo District Uganda

Byamukama Yassin and David Ongabi Nyambane
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Byamukama Yassin: MBA Student (Kampala International University, Uganda)
David Ongabi Nyambane: Senior Member (Faculty of Business and Management) (Kampala International University, Uganda)

International Journal of Research and Scientific Innovation, 2025, vol. 12, issue 3, 577-588

Abstract: Savings and Credit Cooperatives (SACCOs) face numerous challenges, including poor governance and management, inadequate financial management and reporting, and limited financial resources and funding. Inefficient operations and outdated technology also hinder their effectiveness, while regulatory compliance challenges and competition from other financial institutions add to the pressure. SACCOs are normally established to help the members in the area to save and get easy access to credit facilities. To achieve the above, the government of Uganda has endeavored to put in place mechanisms including training of staffs, members and management and enforcing rules and regulations governing these SACCOs through the Micro Finance Support Centre. The study was guided by the following objective; to examine the role of credit risk management on the financial performance of saving and Credit Cooperatives Ntungamo District in Uganda. The study employed a quantitative and qualitative research approach utilizing across-sectional survey design. The total population under study was 2750 out of which 278 respondents were selected as the sample size using Slovin’s formula. Sampling methods included purposive, stratified, and simple random sampling to select participants. Data collection was done through structured, self-administered questionnaires, with questions framed on a Likert scale ranging from 1 to 5. descriptive statistics was used in data analysis which contained use of percentages, frequencies and measures of central tendency. 10% of the sample size as a pilot study in order to test the reliability, validity was tested by using CVI. Regression analysis was used to establish the relationship between independent and dependent variables. The result indicated that there was a positive but insignificant impact of cash Management on financial performance of saving and Credit Cooperatives. The finding also shows that there was a very weak but positive correlation between Credit Risk Management and Financial Performance which is statistically significant. It suggests that increased credit risk Management Practices have minimal association with improved financial performance. While still statistically significant, the correlation implies that credit risk management might have a negligible direct impact on financial performance compared to other potential factors

Date: 2025
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