EFFECT OF CREDIT MANAGEMENT PRACTICES ON FINANCIAL PERFORMANCE OF DEPOSIT-TAKING SAVINGS AND CREDIT COOPERATIVE SOCIETIES: A CASE STUDY OF UASIN GISHU COUNTY FARMERS COOPERATIVE SOCIETIES

Abstract: Credit management practices refer to the strategies and techniques used by individuals and businesses to effectively manage their credit activities. The purpose of the study was to investigate the effects of credit management practices on financial performance of deposit taking savings and credit cooperative societies a case study of Uasin Gishu farmers’ cooperative society. The study was guided by the following research objectives: to determine the effect of credit policy on financial Performance of Deposit-Taking Savings and Credit Cooperative Societies in Uasin Gishu County; to determine the effect of credit evaluation on financial performance of deposit-taking Savings and Credit Cooperative Societies in Uasin Gishu County; to determine the effect of Credit Limits have an effect on financial performance of deposit-taking Savings and Credit Cooperative Societies in Uasin Gishu County; to determine the effect of loan terms and conditions have an effect on financial performance of Deposit-Taking Savings and Credit Cooperative Societies in Uasin Gishu County.The research design chosen for this study is a descriptive survey. The target population was Director, Manager, 10 credit control and 70 general employees. The researcher concluded that the credit policy of Deposit-Taking Savings and Credit Cooperative Societies (SACCOs) can have a significant impact on their financial performance in Uasin Gishu County. Here is a conclusion summarizing the potential effects: The credit policy directly influences the quality of loans granted by SACCOs. A well-designed credit policy ensures proper assessment of borrowers' creditworthiness, reducing the risk of default. By implementing strict criteria for loan approval, SACCOs can minimize the number of non-performing loans, leading to improved financial performance. Credit evaluation impacts the cost of credit for SACCOs and borrowers. Through a thorough evaluation process, SACCOs can determine the appropriate interest rates and fees to charge based on the perceived risk. Accurate assessment helps SACCOs set fair and competitive rates, ensuring sustainable revenue generation while also providing affordable credit options to members. Credit limits play a crucial role in managing credit risk for SACCOs. By setting appropriate limits based on the borrower's creditworthiness, income, and collateral, SACCOs can control their exposure to potential defaults. The terms and conditions established by SACCOs directly impact the quality of their loan portfolio. By setting clear and stringent criteria for loan approval, such as minimum credit scores, income requirements, and collateral standards, SACCOs can ensure that loans are granted to creditworthy borrowers. This reduces the risk of default and improves the overall quality of the loan portfolio, thereby enhancing the financial performance of the SACCO. In view of these conclusions, the following recommendations were made \SACCOS should establish well-defined and documented credit guidelines that outline the eligibility criteria for borrowers, loan terms and conditions, risk assessment procedures, and credit limits. This helps ensure consistency in credit decisions and reduces the risk of default. A thorough credit appraisal process should be in place to assess the creditworthiness of potential borrowers. This includes evaluating their financial standing, repayment capacity, collateral, and any other relevant factors. A rigorous appraisal process minimizes the risk of default and helps maintain a healthy loan portfolio. Diversify loan portfolio: SACCOS should aim to diversify their loan portfolio by offering different types of loans tailored to meet the varying needs of their members. This reduces concentration risk and improves the overall financial stability of the SACCOS. Effective credit evaluation practices ensure that loans are extended to creditworthy borrowers with a high likelihood of repayment Keywords: Credit Policy; Credit Evaluation; Credit Limits; Loan Terms and Conditions. Title: EFFECT OF CREDIT MANAGEMENT PRACTICES ON FINANCIAL PERFORMANCE OF DEPOSIT-TAKING SAVINGS AND CREDIT COOPERATIVE SOCIETIES: A CASE STUDY OF UASIN GISHU COUNTY FARMERS COOPERATIVE SOCIETIES Author: Irene Cherono International Journal of Management and Commerce Innovations ISSN 2348-7585 (Online) Vol. 13, Issue 2, October 2025 - March 2026 Page No: 222-236 Research Publish Journals Website: www.researchpublish.com Published Date: 18-December-2025 DOI: https://doi.org/10.5281/zenodo.17974696 Paper Download Link (Source) https://www.researchpublish.com/papers/effect-of-credit-management-practices-on-financial-performance-of-deposit-taking-savings-and-credit-cooperative-societies-a-case-study-of-uasin-gishu-county-farmers-cooperative-societies