Members' Attitudes Towards the Loan Policy of the Savings and Credit Co-operative Societies in Kenya: the Case of Chuna Co-operative Savings and Credit Society Ltd

Abstract

Savings and Credit Co-operative Societies, though relatively a recent development in Kenya, have become one of the important financial institutions in the country's Economic and Financial systems. Having realized their socio-economic potential, the government periodically issues and reviews policies that guide their operations. This researcher's major objectives were to find out the attitudes of members toward one such policy, the Loan Policy of the Savings and Credit Co-operative Societies in Kenya, and secondly to find out any aspects in the Loan Policy that members were dissatisfied with. The rationale being that, the members' attitudes were one of the important predictors of the government's attainment of its goals and objectives of mobilizing local finance capital for development using these societies. The study was carried, out in CHUNA Savings and Credit Co-operative Society, Ltd. of the University of Nairobi. A sample of one hundred respondents was used, and data for the study was collected by a Questionnaire using semantic differential scales. From the analyses of thie data that was analysed and presented by means of mean scores, percentages and semantic differential profiles, the findings of the study indicate that members' attitudes toward the Loan Policy varied from positive to negative depending on the particular policy guideline in consideration. Dissatisfaction was expressed, among other aspects, with respect to the policy's restrictive controls on the Maximum Loan and Maximum Emergency Loan amounts, the Emergency Loan Repayment period, Restriction of membership to one society and the Withdrawal requirements. Further, from the analyses, the findings indicated that there was no significant variation in the members' attitudes toward the Loan Policy caused by the differences in their salaries, or the number of years one had been a member of the society. Hence it was concluded that attitudes held and satisfaction or dissatisfaction with the Loan Policy were not depedent on members' salary levels or period of membership. Finally on the basis of the findings it was recommended that government involvement in running the affairs of the societies be restricted to particular areas where it is absolutely essential. This would allow autonomy and democracy to prevail in the day-to-day operations of the societies followed by formation of an institutional framework that can successfully reconcile the moblization of funds for development while at the same time optimally upholding the values of the members