Internal Capabilities on Loan Recovery: Evidence from Selected Savings and Credit Cooperative Societies in Dar es Salaam

Abstract

This study examined the influence of internal capabilities on loan recovery among Savings and Credit Cooperative Societies (SACCOS) in Tanzania. It particularly focused on assessing the influence of management capabilities, technology capabilities and staff capabilities on loan recovery among SACCOS in Dar es Salaam region. The study adopted an explanatory research design aiming at identifying the extent and nature of the underlying relationship between management capabilities, technology capabilities, staff capabilities, and loan recovery. It used primary data collected through structured questionnaires from 213 managers of SACCOS in Dar es Salaam region. Descriptive and multiple regression methods were adopted for data analysis. The results indicate that management capabilities and technology capabilities positively and significantly affect loan recovery performance among SACCOS. Conversely, it was observed that staff capabilities do not relatively affect the loan recovery performance of SACCOS. Furthermore, the findings lead to the conclusion that the resource-based theory and the early recovery model are appropriate for assessing internal capabilities of SACCOS with respect to loan recovery performance. It is therefore recommended that the government consider ingredients which are found in laws and regulations governing the operationalization of commercial banks to enhance management and SACCOS performance. The study also recommends the adoption of technology, as it greatly increases the efficiency of service delivery to members among SACCOS.