Credit Management and the Business Performance of Savings and Credit Cooperative Organisations (SACCOs) in Kampala, Uganda: A Conceptual Framework and Research Agenda

Savings and credit cooperative organisations (SACCOs) lend their members' pooled savings back to those members, so the quality of their credit decisions determines whether they survive. This article examines how credit management might shape the business performance of SACCOs in Kampala, Uganda. It reviews the legal and regulatory setting of Uganda's SACCOs, four earlier Kampala studies of credit and loan performance, and theory on credit rationing, agency problems and risk management. The review finds that existing studies agree on a positive link between credit management and performance, but their samples are small, their measures rely on staff perceptions, several concentrate on a single institution, and some contain internal inconsistencies. The article proposes a framework in which four features of credit management (credit appraisal and standards, credit terms, monitoring and collection, and governance of lending) affect two kinds of performance: financial soundness and member outreach. It states four propositions and outlines a survey and records-based design for a later study. The contribution is a clearer way of studying the question, not a test of it. No new data were collected.