Influence of Loan Size, Collateral Value and Leaders' Creativity on Loan Repayment among Tanzanian Rural Savings and Credit Cooperative Societies

Abstract

The study investigated the effects of loan size, collateral value, and leaders’ creativity on loan repayment in savings and credit cooperative societies (SACCOS) in the rural areas of Morogoro Region, Tanzania. The study employed an explanatory study design and the survey approach. The study population consisted of 4,200 SACCOS borrowers in Morogoro Rural District. A random sampling design was applied to select borrowers who had started repaying their loans. The structured questionnaire collected the primary data from 270 borrowers. The multiple regression technique was used to analyze the field data. The findings disclosed that loan size, collateral value and leaders’ creativity promoted positively and significantly the repayment of loans in rural Tanzanian SACCOS. While most previous studies assessed the determinants of the loan repayment in Tanzania, none of them assessed how the loan size, collateral value and leaders’ creativity promoted the repayment of loans in rural Tanzanian SACCOS. The study recommends the policy makers to enforce loan size, collateral value and leaders’ creativity in SACCOS in Tanzania.

Keywords:       Loan Size, Collateral Value, Leaders’ Creativity and Innovation, Rural SACCOS Loan Repayment, Tanzania