48 Management on loan defaulters on the financial performance 481 The level of

48 management on loan defaulters on the financial

This preview shows page 56 - 60 out of 79 pages.

4.8 Management on loan defaulters on the financial performance. 4.8.1 The level of loan defaulters. Table 4.15 The level of loan defaulters in the Sacco. Frequency Percent Valid Percent Cumulative Percent Valid Very high 1 4.2 4.5 4.5 High 16 66.7 72.7 77.2 Moderate 2 8.3 9.1 86.3 Low 3 12.5 13.6 100.0 Total 22 91.7 100.0 Missing System 2 8.3 Total 24 100.0 In the table above, there is a high percentage indicating that there are loan defaulters in the Sacco. The percentages include 4.5 % very high, 72.7% high, 9.1% moderate and 13% low. A small percentage thought that there are no loan defaulters in the Sacco. This implies that loan default is a big threat to the financial performance of Sacco’s. This may impact the financial performance negatively. 43
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4.8.2 The collaterals needed by borrowers to secure a loan. Table 4.16 The collaterals needed to secure a Loan in the Sacco Frequency Percent Valid Percent Cumulative Percent Valid Guarantors shares 7 29.2 31.8 31.8 Borrowers assets 4 16.7 18.2 50.0 Members contribution 11 45.8 50.0 100.0 Total 22 91.7 100.0 Missing System 2 8.3 Total 24 100.0 From the above table, it shows that 50% of the respondents think that for members to secure the loan they have to use their own contributions as collaterals. While 31.8 % can use guarantors share and 18.2 % can use their own assets as collaterals. This implies that when members decide to defaults he/she loses his or her contributions hence no great loses to the Sacco. 4.8.3 The collection methods used on loan defaulters. 44
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Table 4.17 The loan collection methods from the loan defaulters. Frequency Percent Valid Percent Cumulative Percent Valid Contracting the debt collection expertise 5 20.8 22.7 22.7 Contracting the debt collection agencies 7 29.2 31.8 54.5 Through phone calls 10 41.7 45.5 100.0 Total 22 91.7 100.0 Missing System 2 8.3 Total 24 100.0 In the table it is clearly shown that the Sacco can use phone calls to follow loan defaulters which is 45.5 %, it can also contract a debt collection agencies or contract a debt collecting expertise. This shows that phone calls are the cheaper method that can be used by the Sacco hence low cost of debt collection. When the Sacco has to use more money to collect the loan defaultments it means that its financial performance will be reduce day by day hence leading to losses especially if they involve the expertise in loan collection or the use of agencies. 4.9 Discussions for study findings. 4.9.1 Loan repayments and the financial performance. Here the researcher wants to determine the relationship between the loan repayments and the financial performance of the Mombasa port Sacco, Kenya. The Sacco uses check of system and monthly cash installment. Check of system was used by the members who borrows money from the Kenya cargo handling services ltd, while monthly cash installment was used by other 45
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member who were mainly drawn from Kenya ports Authority, institutions within Mombasa county and across the country, former KPA employees {pensioners } and the business community. From the previous researchers, they indicated that the loan repayments were very poor since the Sacco targeted the poor people in the society. According to Mombasa port Sacco,
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