Corporate governance practices and performance of cooperative financial institutions The Case of Selected SACCOS in Kilimanjaro Region

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University of Dar es Salaam
This study examined the relationship between corporate governance practices and performance of cooperative financial institutions. The study was conducted in Kilimanjaro region. Specifically, it examined whether the cooperative financial institutions conform to corporate governance practices, determined the impact of the corporate governance practices on the performance of cooperative financial institutions and identified the challenges facing cooperative financial institutions in conforming to corporate governance practices. The study employed explanatory research design. Sample size was seventy respondents made of SACCOS staff, committee and board members, however response were sixty five respondents. Both primary and secondary data were collected. Primary data were collected through questionnaires, interview and observation and secondary through documentary review. Data were analyzed using descriptive statistic, correlation, ANOVA test and multiple regressions analysis to determine relationship between corporate governance (independent) and performance of cooperative financial institution. Findings revealed that more than fifty percent of SACCOs were found to comply less with corporate governance practices. The practices tested were education level of board members, board size, internal control and internal audit, reporting and disclosure and board composition in terms of skills furthermore corporate governance and performance were found to be positively correlated and fraud, low member’s participation and Insufficient board members knowledge and skills needed to make business judgments and low level of accountability were found to hinder effective corporate governance practices. The weak corporate governance has lead to fraud and low membership in SACCOS. The study recommends for SACCOS to regularly organize business management skills training for the board members. This will improve the level of supervision and monitoring within the SACCOS. Furthermore cooperative laws should stipulate heavy punishment for fraud since fraud has been regular practice in SACCOS. Regarding low level of member’s participation, SACCOS should regularly provide training to its members to enhance their understanding of SACCOS operations and their position in decision making.
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Corporate governance, Cooperative financial institutions, Credit Unions, Kilimanjaro region, Tanzania
Patrick, L.(2013). Corporate governance practices and performance of cooperative financial institutions The Case of Selected SACCOS in Kilimanjaro Region. Master dissertation, University of Dar es Salaam. Available at (