Influence of Supervisory Committees on the Financial Performance of Savings and Credit Cooperative Societies (Saccos) In Ruvuma Region

Abstract

The study examined the influence of the supervisory committee on the financial performance of SACCOS in Ruvuma. Three objectives guided the study: to determine the effect of gender diversity on financial performance, to determine the effect of age diversity on financial performance and to determine the effect of educational level on financial performance. The study was guided by Agency theory, Stakeholders theory and Stewardship theory to lay a foundation for the examination of the relationship between these variables. The positivist and interpretivism research philosophy was used in this study. Moreover, this study employed a quantitative cross-sectional research approach. The research design used in this study is explanatory. Purposive sampling was used to extract 44 sample size from a population of 62 SACCOS registered in Ruvuma region in which 132 observations were scrutinized. The financial reports were used to extract secondary data for this study. The data were analyzed using combination of Descriptive statistics, correlation and multiple regression which were produced by the statistical software STATA. The study found that all independent variables; Age diversity and Educational level of members were found to be positive and significantly related to the dependent financial performance (ROA). However, the independent variable: Gender diversity was found statistically insignificant. Based on the findings it is recommended that a balanced age diversity in the compaosition of supervisory committee members do enhances influences and improves financial performance as such SACCOS in Ruvuma should employ a more balanced age diversity to imrove their influences and financial performance. Secondly, including more educated members in the supervisory committee shows an increase in the influences of the committee and improves the financial performance. Hence, the SACCOS in Ruvuma is recommended to include more skilled members in their supervisory body to improve their financial performance. Lastly, further studies should explore a longitudinal study of demographic characteristics of supervisory and governing bodies for a longer period of time, complementing with a qualitative technique to understand the long-term effect of these variables on financial performance.