Financing Alternatives for SACCOS and their Impact on Financial Performance: Evidence from Tanzania


  • Mosses Mwizarubi PhD Student Financial Analyst, Bank of Tanzania.
  • Ramarcha Kumar Associate Professor, Galgotias University, Greater Noida – India.
  • Bernard Mnzava Senior Lecturer, Institute of Finance Management, Dar es salaam , Tanzania,
  • Sadananda Prusty Professor, Galgotias University, Greater Noida – India.


Microfinance, Financial Sustainability, Capital Structure


This paper examines the impact of capital structure on financial performance for Savings and Credit Cooperative Societies (SACCOS). The study uses panel data of 484 observations of SACCOS whose information was gathered by the Bank of Tanzania from 2008 to 2012. Using fixed effects approach, the findings indicate that increased use of members’ savings and using larger proportion of resources for lending purposes lead to a better financial performance. Firm size is found to have a negative impact while debt usage does not guarantee good performance. The results are robust to alternative regression estimates. To the best of our knowledge, this is the first time a study is conducted on the impact of capital structure on financial performance of SACCOS. Previous studies concentrated on banking industry and other types of MFIs apart from SACCOS. This fact makes the findings of this research to be unique.


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