Service Quality Management Practices and Financial Sustainability of SACCOS in Magu and Kwimba Districts, Tanzania: The Mediating Effect of Service Innovation

Abstract

The study examined the structural relationships between service quality management practices (SQMP) and financial sustainability (FS) with mediating effect of Service innovation practices (SIP). A cross-sectional research design was employed with a Quantitative approach. Data was collected from 351 SACCOS members in Mangu and Kwimba Districts using a structured questionnaire. Data was analyzed using Structural Equation Modelling (SEM) with bootstrapping method, revealing that SQMP significantly and positively (β = 1.109; p < 0.001; β = 0.650, p < 0.05) influence both the SIP and FS. The SIP strongly (β = 0.860; p < 0.001) mediate the relationship between SQMP and FS. The study concludes that, while SQMP directly enhances the FS, its effectiveness is reinforced when coupled with SIP. The study recommends SACCOS leaders, management, unions and supporting stakeholders to institutionalize SQMP integrated with SIP to ensure FS of SACCOS in the study area.

Keywords:       Service Quality Management, Service Innovation, Financial Sustainability, SACCOS