Credit Management and Loan Performance of Saccos in Kampala, Uganda: A Case Study of Uganda Cooperatives Savings and Credit Union (UCSCU).

ABSTRACT

The purpose of this study was to investigate the effect of credit management on loan performance of Uganda Cooperatives Savings and Credit Union (UCSCU). The study was based on the following 4 objectives; (I) To assess the effect of credit terms on loan performance of Tropical Bank in Uganda; (II) To determine the effect of credit standards on loan performance of Tropical Bank in Uganda; (III) To determine the relationship~ between credit policy and loan performance of Tropical Bank in Uganda (IV) To establish the effect of collection policy on loan performance of Tropical Bank in Uganda. The study employed a cross-sectional research design and a sample size of 67 respondents were used for this study. The findings revealed that; credit terms is positively (/3=0.819) and statistically and siqnificantly (p-value=0. 000) affect loan performance of UCSCU; credit standards is positively (/3=0.650) and statistically and siqnficantly (p-value=0. 001) affect loan performance of UCSCU; credit policy is positively (/3=0.988) and statistically and significantly (p-value=0. 000) affect loan performance of UCSCLJ; and credit collection poilcy is positively (/3=0.892) and statistically and significantly (p-value=0, 000) affect loan performance of UCSCU The study concluded that; credit terms have a positive significant effect on loan performance of UCSCL~ credit standards statistically and si~inificantly affects loan performance of UCSC14~ credit policy have a positive sIqnificant effect on loan performance of UCSCLI; and credit collection poilcy have a positive significant effect on loan performance of UCSCU The study recommended that; UCSCU should effectively manage its interest rate for loan repayment and credit worthiness; have effective penaltiesput on default andlate repayment; use auctioneers to recover loans and should normally sale of the property to recover loans. The study contributed to existing knowledge in the following ways; the study developed great ideas for credit terms, credit standards, credit policy and credit collection policy; the study findings helped LJCSCU for comprehensively receive customers’complaints to the management to provide possible and appropriate solutions; and the study clearly discussed constructs ofindependent and dependent variables and clearly indicated the gaps that existed from previous studies as explained from the discussion of the findings section.