Effect of Outreach on Financial Sustainability and Profitability of Saving and Credit Cooperatives in Eastern Ethiopia
This study scrutinized the effect of outreach on financial sustainability and profitability of SACCOs in Eastern Ethiopia using balanced panel data from 33 SACCOs over the period of 2017-2019. Quantitative approach and explanatory design were employed to realize the stated objective. This study used...
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| Format: | Article |
| Language: | English |
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Warsaw University of Life Sciences Press
2020-06-01
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| Series: | Zeszyty Naukowe Szkoły Głównej Gospodarstwa Wiejskiego w Warszawie. Problemy Rolnictwa Światowego |
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| Online Access: | https://prs.sggw.edu.pl/article/view/2612 |
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| _version_ | 1832540950975479808 |
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| author | Mekonnen Yitayaw |
| author_facet | Mekonnen Yitayaw |
| author_sort | Mekonnen Yitayaw |
| collection | DOAJ |
| description | This study scrutinized the effect of outreach on financial sustainability and profitability of SACCOs in Eastern Ethiopia using balanced panel data from 33 SACCOs over the period of 2017-2019. Quantitative approach and explanatory design were employed to realize the stated objective. This study used secondary data sources, mainly audited financial statement of the SACCOs, in the study period. The analysis revealed that SACCOs in Eastern Ethiopia are profitable but not financially sustainable. Random effect model results show that gross loan to asset ratio, yield on gross loan portfolio, managerial and operational efficiency has statistically significant and positive effect on the financial sustainability of SACCOs, while average loan size has statistically significant but negative effect. Likewise, gross loan to asset ratio, managerial efficiency, and average loan size has statistically significant and positive effect on the profitability of SACCOs in Eastern Ethiopia. However, the portion of women borrowers and number of active borrowers has statistically significant but negative effect on the profitability of the SACCOs in the study area. Finally, the study suggests that increasing the number of borrowing clients and sales volume (loan portfolio) could benefit SACCOs in Eastern Ethiopia from economics of scale. |
| format | Article |
| id | doaj-art-530ab3120d304690a8572baca2b84368 |
| institution | Kabale University |
| issn | 2081-6960 2544-0659 |
| language | English |
| publishDate | 2020-06-01 |
| publisher | Warsaw University of Life Sciences Press |
| record_format | Article |
| series | Zeszyty Naukowe Szkoły Głównej Gospodarstwa Wiejskiego w Warszawie. Problemy Rolnictwa Światowego |
| spelling | doaj-art-530ab3120d304690a8572baca2b843682025-02-04T10:43:12ZengWarsaw University of Life Sciences PressZeszyty Naukowe Szkoły Głównej Gospodarstwa Wiejskiego w Warszawie. Problemy Rolnictwa Światowego2081-69602544-06592020-06-0120210.22630/PRS.2020.20.2.12Effect of Outreach on Financial Sustainability and Profitability of Saving and Credit Cooperatives in Eastern EthiopiaMekonnen Yitayaw0Haramaya University, EthiopiaThis study scrutinized the effect of outreach on financial sustainability and profitability of SACCOs in Eastern Ethiopia using balanced panel data from 33 SACCOs over the period of 2017-2019. Quantitative approach and explanatory design were employed to realize the stated objective. This study used secondary data sources, mainly audited financial statement of the SACCOs, in the study period. The analysis revealed that SACCOs in Eastern Ethiopia are profitable but not financially sustainable. Random effect model results show that gross loan to asset ratio, yield on gross loan portfolio, managerial and operational efficiency has statistically significant and positive effect on the financial sustainability of SACCOs, while average loan size has statistically significant but negative effect. Likewise, gross loan to asset ratio, managerial efficiency, and average loan size has statistically significant and positive effect on the profitability of SACCOs in Eastern Ethiopia. However, the portion of women borrowers and number of active borrowers has statistically significant but negative effect on the profitability of the SACCOs in the study area. Finally, the study suggests that increasing the number of borrowing clients and sales volume (loan portfolio) could benefit SACCOs in Eastern Ethiopia from economics of scale.https://prs.sggw.edu.pl/article/view/2612Eastern Ethiopia; financial sustainability; outreach; profitability; SACCOs |
| spellingShingle | Mekonnen Yitayaw Effect of Outreach on Financial Sustainability and Profitability of Saving and Credit Cooperatives in Eastern Ethiopia Zeszyty Naukowe Szkoły Głównej Gospodarstwa Wiejskiego w Warszawie. Problemy Rolnictwa Światowego Eastern Ethiopia; financial sustainability; outreach; profitability; SACCOs |
| title | Effect of Outreach on Financial Sustainability and Profitability of Saving and Credit Cooperatives in Eastern Ethiopia |
| title_full | Effect of Outreach on Financial Sustainability and Profitability of Saving and Credit Cooperatives in Eastern Ethiopia |
| title_fullStr | Effect of Outreach on Financial Sustainability and Profitability of Saving and Credit Cooperatives in Eastern Ethiopia |
| title_full_unstemmed | Effect of Outreach on Financial Sustainability and Profitability of Saving and Credit Cooperatives in Eastern Ethiopia |
| title_short | Effect of Outreach on Financial Sustainability and Profitability of Saving and Credit Cooperatives in Eastern Ethiopia |
| title_sort | effect of outreach on financial sustainability and profitability of saving and credit cooperatives in eastern ethiopia |
| topic | Eastern Ethiopia; financial sustainability; outreach; profitability; SACCOs |
| url | https://prs.sggw.edu.pl/article/view/2612 |
| work_keys_str_mv | AT mekonnenyitayaw effectofoutreachonfinancialsustainabilityandprofitabilityofsavingandcreditcooperativesineasternethiopia |