Assessing of Financial Sustainability

Abstract

The study sought out to examine financial sustainability at Masaka Microfinance and Development Cooperative Trust Ltd. This study examined the level of financial sustainability, the challenges that affect financial sustainability, and to suggest strategies to counterbalance the challenges of improving financial sustainability at MAMIDECOT. The study adopted a cross-sectional research and quantitative design. Sixty three questionnaires were disturbed out and only forty six were returned accounting for 73% response rate. The data were input and analyzed using Statistical package for social scientists (SPSS 23). Descriptive statistics such as; frequencies, mean and standard deviations were generated to answer the questions of the study. In addition validity and reliability were carried to test for the research instrument and all values were above 0.7. The findings indicate that the level of financial sustainability in terms of operational sufficiency was average while financial sufficiency was low. For MAMIDECOT to realize a more desirable position of financial sustainability, the entity has to work on the challenges of inadequate capital to comfortably run its operations, non-payment of loans by our clients, clients who obtain loans higher than the amount that they are able to repay, and failure to have clear set guidelines to guide selection of credit worthy clients. Despite these challenges, MAMIDECOT should continue to improve financial sustainability by use of qualified personnel to run the cooperative activities, adopt modern and up to date technology in the SACCO operations, ensure that the personnel are under close supervision by management, diversify its line of business in order to spread its risk, and attract more clients by advancing to them loans at lower rates.