Corporate governance, liquidity and financial sustainability of microfinance institutions in uganda. A case study of saccos in Kampala
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Date
2018-12-07
Authors
Kigozi, Henry Lwanga
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Abstract
Financially sustainable MFIs that include SACCOs have been identified as a prime source of capital for economic development in countries. They also offer other instrumental social benefits. This study aimed at assessing the relationship between Corporate Governance, Liquidity and Financial sustainability of SACCOs in Uganda. A cross sectional research design and quantitative approaches were employed. Self-administered questionnaires were used for the data collection from a sample of 48 SACCOs with a total of 288 respondents.
Correlation and Regression analysis were conducted and results reveal that there was a positive significant association between corporate governance and liquidity, corporate governance and financial sustainability and liquidity and financial sustainability. Results further indicate that corporate governance and liquidity were statistically significant predictors of financial sustainability.
Thus, SACCOs need to observe the corporate governance principles which include; having a diversified board with vast knowledge that can formulate sound policies, a board that is transparent and with different roles for different officials to provide the checks and balances, aboard with education competences and continuously undertake refresher courses and seminars to improve the expertise of members in the SACCOs.
In addition, SACCOs should set limits on savings withdrawals and the use of customers’ savings as a source of funding to avoid liquidity risks so as to improve their financial sustainability.
Description
A dissertation submitted to the Directorate of Research and Graduate studies in partial fulfillment of the requirements for the award of the degree of Master of Business Administration of Makerere University
Keywords
Corporate governance, Liquidity, Financial sustainability, Micro-finance institutions, Uganda, SACCO
Citation
Henry., K L (2018), Corporate governance, liquidity and financial sustainability of microfinance institutions in uganda. A case study of saccos in Kampala