ANALYSIS OF FINANACIAL PERFORMANCE AND ASSOCIATED PROBLEMS IN THE CASE OF PRIMERY SAVING AND CREDIT COOPERATIVES SOCITIES IN BOREDA WOREDA, SNNPR, ETHIOPIA

Abstract

The concern of the study is analyzing the financial performance and related problems of primary saving and credit cooperative society’s located in SNNPR, Gamo Gofa Zone, and Boreda Woreda. Therefore, the main objective of the study is analyzing the studied cooperative growth level through ratio analysis. Moreover, the factors related with saving mobilization strategy, loan disbursement and recovery practices, the leaders required financial skills and knowledge of the studied cooperative was given emphasis by the researcher. Quantitative research design is used to analyze the level of financial growth by analyzing the data for the period 2006 – 2014. The population of the study consists of 4 audited primary SCCSs and the primary and secondary data collected from these cooperative societies was descriptively and exploratory analyzed using descriptive statistics, ratios and tables. Moreover, a non probability purposive sampling technique was applied for selecting SCCSs which were consecutively audited between the years 2006 up to 2014. Simple random sampling technique was used to select respondents (committee members) from the selected cooperatives. Accordingly, from the total 64 numbers of committee members 55 taken as sample size based on sample size formula referenced in this thesis. The hypothesis was analyzed using T-test through spss statistical software. As a result the study found that absence of inadequate liquidity status, low profitability, inefficiency and inadequate solvency position of the studied cooperative societies. Besides, lack of adequate saving and credit mobilization strategy, poor loan disbursement and collection practices and absence of adequate financial skill and related knowledge of leaders of cooperative influence performance of these SCCSs. Therefore, the study concluded that SCCS’s need to improve on their liquidity, profitability, efficiency and solvency position and also needs to improve their saving and credit mobilization strategy, loan disbursement and recovery practic es and enhancing the financial skill and knowledge required to leaders of the studied cooperatives.