42 Loan repayment and financial performance of a Interest rates

42 loan repayment and financial performance of a

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2.4.2 Loan repayment and financial performance of a Sacco ............................................................................... 19 2.4.3 Interest rates charged and the financial performance of Sacco .................................................................... 20 2.4.4 Membership enrollment ............................................................................................................................... 20 2.4.5 Duration of loan repayment ......................................................................................................................... 22 2.4.6 Management of loan defaulters .................................................................................................................... 22 2.5 Knowledge gap ............................................................................................................................................... 23 2.6 Summary of literature ..................................................................................................................................... 23 CHAPTER THREE .................................................................................................................... 25 3. RESEARCH METHODOLOGY ........................................................................................... 25 3.1 I NTRODUCTION ..................................................................................................................... 25 3.2. R ESEARCH DESIGN .............................................................................................................. 25 3.3. T ARGET P OPULATION .......................................................................................................... 26 3.4. S AMPLE SIZE AND SAMPLING PROCEDURE .......................................................................... 26 3.4.1 Sample Size .................................................................................................................................................. 26 viii
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3.4.2 Sampling Procedure ..................................................................................................................................... 26 3.4.3 Sampling technique ...................................................................................................................................... 27 3.5 D ATA C OLLECTION ............................................................................................................... 28 3.5.1 Pilot testing .................................................................................................................................................. 28 3.6 D ATA COLLECTION PROCEDURE ........................................................................................... 29 3.7. D ATA ANALYSIS PROCEDURE ............................................................................................... 29 CHAPTER FOUR ...................................................................................................................... 30 4. DATA ANALYSIS, PRESENTATION AND INTERPRETATION .................................... 30 4.1 I NTRODUCTION ..................................................................................................................... 30 4.2 Q UESTIONNAIRE RETURN RATE ............................................................................................ 30 4.3 D EMOGRAPHIC CHARACTERISTICS OF RESPONDENTS .......................................................... 30 4.3.1. Distribution of respondents by Gender ....................................................................................................... 30 4.3.2 Distribution of respondents by Age ............................................................................................................. 31 4.3.3. Distribution of the respondents by the marital status .................................................................................. 32 4.3.4 Distribution of the respondents by the level of education ........................................................................... 32 4.3.5 Distributions of respondents by the number of years worked in the Sacco ................................................. 33 4.4 L OAN REPAYMENT ON THE FINANCIAL PERFORMANCE OF A S ACCO ................................... 33 4.4.1 System used on the loan repayment ............................................................................................................. 34 4.4.2 Maximum period given on the loan repayment ........................................................................................... 34 4.5 I NTEREST RATE CHARGED ON THE FINANCIAL PERFORMANCE OF A S ACCO ........................ 36 4.5.1 Average interest rate charged ....................................................................................................................... 36 4.5.2 Interest rates charged compared with other Sacco’s .................................................................................... 36 4.5.3 Stability of the interest rate charged ............................................................................................................ 37 4.6 M EMBERSHIP ENROLLMENT ON FINANCIAL PERFORMANCE OF A S ACCO ............................ 38 4.6.1 Trend on the membership enrollment .......................................................................................................... 38 4.6.2 Percentage of active members ..................................................................................................................... 39 4.6.3 Annual dividend paid ................................................................................................................................... 40 4.7 D URATION OF LOAN PROCESSING ON THE FINANCIAL PERFORMANCE OF A S ACCO ............ 41 4.7.1 The duration the Sacco takes to disburse the loan to the borrower .............................................................. 41 4.7.2 Average amount to be disbursed in a day ..................................................................................................... 41 4.7.3 Frequency and the nature of the customer complaints ................................................................................. 42 4.8 M ANAGEMENT ON LOAN DEFAULTERS ON THE FINANCIAL PERFORMANCE ......................... 43 4.8.1 The level of loan defaulters .......................................................................................................................... 43 4.8.2 The collaterals needed by borrowers to secure a loan ................................................................................. 44 4.8.3 The collection methods used on loan defaulters .......................................................................................... 44 4.9 D ISCUSSIONS FOR STUDY FINDINGS ..................................................................................... 45 4.9.1 Loan repayments and the financial performance ......................................................................................... 45 ix
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4.9.2 Interest rate charged and the financial performance .................................................................................... 46 4.9.3 Membership enrollment and the financial performance .............................................................................. 46 4.9.4 Duration of loan processing and the financial performance ........................................................................ 47 4.9.5 Management of loan defaulters and the financial performance ................................................................... 47 SUMMARY OF FINDINGS CONCLUSION AND RECOMMENDATIONS ...................... 49 5.1 I NTRODUCTION ..................................................................................................................... 49 5.2 S UMMARY OF FINDINGS ....................................................................................................... 49 5.2.1 Loan repayments and the financial performance of Mombasa port Sacco .................................................. 49 5.2.3 Membership enrollment and the financial performance of Mombasa port Sacco ....................................... 50 5.2.4 Loan processing duration and the financial performance of Mombasa port Sacco ..................................... 50 5.2.5 Management of loan defaulters and the financial performance of Mombasa port Sacco ............................ 51 5.5 C ONCLUSION ........................................................................................................................ 51 5.6 R ECOMMENDATIONS FOR POLICY ISSUES ............................................................................. 52 5.7 A REAS FOR FURTHER RESEARCH .......................................................................................... 52 REFERENCES ............................................................................................................................ 54 APPENDIX 1: LETTER TO THE RESPONDENTS .............................................................. 57 APPENDIX 2: QUESTIONNAIRES ........................................................................................ 58 APPENDIX 3. WORK PLAN .................................................................................................... 62 APPENDIX 4. BUDGET SUMMARY ...................................................................................... 63 x
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LIST OF TABLES.
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