Abstract:
This research aims to evaluate the effect that credit risk management has on the financial
viability of Savings and Credit Cooperative Societies (SACCOS) located in the Babati
Town Council. The study examined the impact of credit evaluation techniques, debt
collection procedures, and credit monitoring procedures on the financial viability of
SACCOS. The study utilized case study design. Purposive sampling was employed to pick
51 Sacco’s members from the target population of all five registered SACCOS in the
district. The sample size was determined by 23.7% of the target population (215). Semi
structured questionnaires were utilized for
4
data
collection
and
analysis was conducted
using descriptive statistics and inferential statistics using SPSS. Validity was verified
through
the
use
of pilot study, and reliability was evaluated with
the
use
of Cronbach's
Alpha values in which the coefficient of 0.79 discovered. The study findings revealed that,
revealing that both credit appraisal procedures have a statistically significant positive
impact on financial sustainability. The high R-squared value underscores the explanatory
power of these procedures in the financial performance of SACCOS, emphasizing that
robust credit assessment processes are pivotal for improved financial sustainability. It is
recommended that Savings and Credit Cooperative Societies (SACCOS) in the Babati
Town Council focus on strengthening their credit risk management practices. This includes
further enhancing and refining their credit appraisal procedures to ensure they align with
best practices and institutional risk tolerance
