Factors Affecting Fund Management among Village Community Banks (VICOBAs); a Case of Registered VICOBAs in Iringa Municipality

Abstract

The primary objective of this study was to assess the factors affecting fund management among Village Community Banks (VICOBAs), focusing on registered VICOBAs in Iringa Municipality under Iringa municipal council. Specifically, the study aimed to investigate the impact of timely loan repayment, financial record keeping, and the economic activities of groups of VICOBA on fund management. The research targeted a population of 104 accountants and treasurers from 104 registered VICOBAs in Iringa Municipality, and a sample size of 83 accountants and treasurers from 83 registered VICOBAs were selected for the study. A cross-sectional research design was employed, where a quantitative approach was applied to collect data. Simple random sampling and convenience sampling were used to select accountants and treasurers from those 83 registered VICOBAs from 18 wards within Iringa Municipality. Data was analysed by using descriptive statistics and regression analysis so as to determine the relationship between fund management among VICOBAs as dependent variable to timely loan repayment, financial records keeping and economic activities of the groups of VICOBAs in Iringa municipality as independent variables. The results revealed that there was a positive relationship between all independent variables and the dependent variable, which is fund management among registered VICOBAs. Furthermore, the results revealed that lack of timely loan repayment, poor financial records keeping, and poor performance of economic activities of the groups led to poor fund management among registered VICOBAs in Iringa municipality. Based on the study findings, it is concluded that the lack of timely loan repayment, poor financial record keeping, and poor performance of economic activities of the groups significantly contribute to poor funds management within VICOBAs in Iringa Municipality. The researcher made several recommendations whereby among the recommendations was that VICOBAs should prioritise the provision of collateral security for loans to mitigate the risks associated with untimely loan repayment