Challenges Facing Savings and Credit Cooperative Societies in Debts Collection in Tanzania

Savings and Credit Cooperative Societies (SACCOS) emerged out of the credit system of the old cooperatives that started from different stage during the colonial period. They began as ROSCAs in 1920 and they were common in cash crop producing areas. These cooperative societies mainly focused on providing loan and saving products to their members. Through its emphasis on efficient financial services, many cooperative societies still facing with a challenge in debts collection practices. The study aimed at investigates the challenges facing Savings and Credit Cooperative Societies (SACCOS) in debt collection at Revival Church Sacco Limited. Specifically, this study intended to analyze procedures used in debt collection at Revival Church Sacco Limited, to examine the competence that meets the requirement of Revival Church Sacco Limited, and to assess policies and guidelines used in debt collection and risk associated with credit application at Revival Church Sacco Limited. The main purpose is to ensure proper debt collection practices at Revival Church Sacco Limited. Case study research design was used along with mixed approach, as well as descriptive research for analyzing both quantitative and qualitative research. The study employed stratified sampling techniques to get a sample of 380 respondents out of a population of 7542 SACCOS members in Revival Church Sacco Limited. The tools for the study were questionnaires interviews and document analysis. Findings revealed that there was poor technique procedure in debt collections, lack of staff intellectual capabilities (competence and qualifications), lacked adequate policies and poor internal control in debt collections practices. However, researcher recommended that Organization should revise its receivable management plan to ensure it complies with policies, conducting of effective training and seminars to employees to keep them updated and investing in diversified portfolio. The study concluded that sustainable financial service is the key to efficiency operation hence, Revival Church Sacco Limited should operate in conducive environment which obviously support the overall performance of an organization in debt collection practices. They should observe the good and unique procedures in order to make operation smoothly with imposing a strictly policies and guidelines to ensure all practices are carried in accordance with the rules and regulation.