CHALLENGES FACING SAVINGS AND CREDIT COOPERATIVES SOCIETIES IN ADDIS ABABA

Abstract

The main purpose of this study was to identify the challenges of Savings and credit cooperatives (SACCOs) in Addis Ababa. The study followed qualitative research approach and exploratory research design. Purposive quota sampling methods were employed to select the sample respondents. Primary and secondary sources of data were used. A review of relevant documents, interview schedule and focus group discussion were prepared and administered with purposely selected SACCO members, various committee members and cooperative officials and auditors at Addis Ababa city, sub-city and federal level. The collected data were analyzed by content analysis. Poor governance and leadership, lack of skilled manpower, lack of office and materials, poor educational status of committees and poor members’ participation, lack of audit service, lack of appropriate support from cooperative promoters and NGOs, regulatory limitation and non awareness of the existing opportunities by the members are the main findings. Based on the above findings, the following recommendations were proposed: SACCOs should provide member driven services, diversified financial product, hire qualified manpower in the right position, strengthening the governance and internal control system. Cooperative promotion and development sector at city and federal level, donors and other stakeholders should assist SACCOs to undertake awareness creation program, training, education, and information about SACCOs’ operations, credit, shares and investment, providing regular audit and inspection service, technical and material assistance. In addition, the government should revise the current cooperative promotion and development structure, restructuring and producing appropriate regulatory environment for SACCOs. Finally, Universities should undertake research studies on financial cooperative are the possible recommendations. Key words: challenges, savings, credit, and cooperatives, Addis Ababa