THE IMPACT OF SACCOs ON TEACHERS AND NATIONAL ECONOMIC GROWTH AND DEVELOPMENT IN KENYA: A CASE STUDY OF MWALIMU NATIONAL SACCO LTD.

Abstract

SACCOs are said to have played a significant role in the improvement of the living standard of many people over the world. The research entailed establishing the impact of Mwalimu Sacco on Kenyan teachers’ economic development and growth. The area of study was Nairobi County and its environs. A descriptive research design was employed. The population of the study consisted of 99 teachers including staff of the Mwalimu Sacco, Nairobi County. As such the sample size was eighty (80) which was determined using Yamane’s sample size formula. The researcher distributed questionnaires, in schools within Nairobi County for data collection. The respondents filled out the questionnaires and the researcher collected them at the school’s convenient time. In the study, the researcher wanted to establish what services were offered at the Sacco concerning loan borrowing and if those services enabled teachers to take loans that met their economic growth and development. The services that the researcher focused on were services like investment training for teachers; staff understanding and knowledge of the services they offered to the teachers; Sacco’s innovative capacity to introduce new ideas. Secondly, the researcher carried out the study to establish what loan products were offered at Mwalimu Sacco and if those products were adequate for meeting their economic growth goals. These products were such as education loans, house loans, business loans etcetera. On the same note, the researcher wanted to establish if the teachers were comfortable with the repayment period as well as if those loan products were very helpful for the teachers’ development; the researcher also wanted to establish teachers’ position in recommending their colleagues to Mwalimu Sacco. Thirdly, the researcher wanted to establish the effect of loan limitations and requirements on loan borrowing. Lastly, the researcher wanted to establish the effect of external pressures on Sacco’s performance. The findings of the study showed that the majority (70%) of the teachers agreed that the loans were helpful to them for their economic development/growth. Even though the majority agreed the loans were helpful, there was a concern by some members on the loan products offered at Sacco, a good number of teachers suggested that Sacco needed to improve on the loan products they currently offer. The teachers however responded that the repayment period was not good enough for them, they wished if the Sacco would increase the repayment period and especially because the economic periods were expected to be harder in the near future. The researcher found that Sacco needed to improve on its loan limitations and requirements, as a majority of respondents (79%) felt that these factors affected loan borrowing. By revising and making the requirements more flexible, Sacco can attract more borrowers. Teachers requested Sacco to consider extending the repayment period for loans for this can help attract more borrowers. The Sacco management should consider offering investment training to borrowers, especially young teachers. This can help them make informed hence preventing misuse and maximizing returns. Teachers have suggested that Sacco revise its loan borrowing requirements, as they felt these requirements were affecting borrowing. By making the requirements more reasonable and accessible, Sacco can encourage more teachers to borrow. Teachers recommended that the Sacco management should write to the government and policymakers, requesting them to leave the Sacco(s) to operate on their own. Most respondents (71%) felt that external pressures affected the Sacco's performance. By minimizing government interference, the Sacco can potentially attract more borrowers and improve its overall performance.