OUTREACH, SUSTAINABLITY AND GROWTH OF RURAL SAVING AND CREDIT COOPERATIVES: THE CASE OF AWASH RURAL SAVING AND CREDIT COOPERATIVES UNION

Abstract

Awash Rural Saving and Credit Cooperatives Union has 8,898 members under 78 primary SACCOs and it has been in business since 2005.The objective of this research to measure the growth, sustainability and outreach of the union for the period covered from 2007 to 2013. This study employed exploratory research which examined the secondary data collected from the annual audit report of the union. The financial data is analyzed using WOCCU PEARLS model to assess the growth, sustainability and outreach of the union. Awash RUSACCO Union is found to be not on the right track in terms of sustainability with inconsistent and low growth in key indicators such as poor performance in raising internal source fund, very low earning, high operational cost impede financial service expansion and outreach. Therefore, based on the findings it is recommended that the union shall control operational costs, charge market based interest which covers cost of fund, operational costs and contribute building the institutional capital, introduce new saving products and design appropriate marketing strategy to attract new members and saving, improve its rigid procedures and make member friendly service, revise the basis of dividend payment and decrease dependence on external creditors.