Analysis of Credit Management Practices in Selected Savings and Credit Cooperatives in Eswatini

Thandeka Dube (MBA), & Happyson Bimha (DBA)
Department of Business Administration, Kwaluseni Campus, University of Eswatini, Eswatini


The focus of the research was understanding credit management strategies used in savings and cooperative societies with the view to improve management effectiveness. The research analysed  practices such as vetting  of loan applicants, rating of borrowers, classification of credit and reporting of credit. Thirty five participants participated in in-depth interviews and focus group discussions. The participants gave insight on how Eswatini savings and credit cooperatives managed the issuance of loans to clients. Results showed that the participants were generally satisfied with the manner in which credit was managed in their cooperatives.  However, it emerged that some of the processes in use were not cost effective as they were implemented to meet regulatory requirements at the expense of credit management principles and customer requirements. There was high risk of giving loans to potential defaulters because there was no integration between local cooperatives and the international credit bureau. The fact that information gathered during the vetting process was not effectively implemented when loans were issued to clients exacerbated the risk of advancing loans to potential defaulters. The research recommends the adoption of appropriate pricing strategies for savings and cooperative society’s services, training of staff and borrowers, encouraging cooperation and collaboration among stakeholders.

Key words: Credit management practices, Credit management principles, Issuance of loans, Potential defaulters, Savings and Credit Cooperatives (SACCOS).


  • Ahimbishwe, G. 2002. Credit Background, Guidelines for the Design and management of credit funds. The Micro Finance Banker, issue 2 No4; 13, University of Kenya.
  • Asante, Y.A.2015. Assessing credit management practices in savings and loans companies: A case study of First Allied Savings and Loans Limited. Unpublished MBA thesis, Kwame Nkrumah University of Science and Technology.
  • Bailey, T. 2001. Applying International best practices to South Africa’s SACCOs: Published dissertation, South Africa: De Mont Fort University
  • Boldizzoni, F. 2008. Means and Ends: the idea of capital in the West, 1500-1970. New York: Palgrave Macmillan
  • Bryman, A. 2012. Social research methods, 4th edition, Oxford Univeristy Press;Amazone Publishers.
  • Central Bank of Swaziland 2017. Financial Stability Report. Swaziland Government, Macmillan press
  • Creswell, J. W. 2013. Qualitative Inquiry & Research Design Choosing among Five Approaches (3rd) edition. Thousand Oaks, CA SAGE.
  • Cuevas,C.E. & Bachenan, J. 2018. Financial cooperatives: Issues in Regulation, supervision and institutional strengthening, Washington,D.C. The World Bank Group.
  • Gatuhu.N. 2013.Credit risk management on financial performance of micro finance institution in Kenya. Unpublished MBA project.
  • Haneef, S., Riaz, T., Ramzan, M., Rana, M. A. Ishaq, H. M. & Karim Y. 2012.Impact of Risk Management on Non-Performing Loans and Profitability of Banking Sector of Pakistan. International Journal of Business and Social Science 3(7)
  • Inkumbi, M. 2013. Beyond the 5Cs of Lending. Journal of Banking Regulation, 2009; 9(1):25-45
  • Kariuki, J.N. 2010.”Effective Collection Policy.”Kasneb Publishers, Nairobi
  • Kisaka & Simuyi .2014. Credit risk management techniques used by microfinance institutions in Kenya.
  • Leedy, P.D. and Ormrod, J.E.  2005. Practical Research: Planning and Design, 8th edition, Pearson Merrill Prentice Hall
  • Moti, H., Masinde, J., Mugenda, N. & Sindani, M. 2012. Effectiveness of credit management system on loan performance: empirical evidence from micro finance sector in Kenya. International Journal of Business Humanities and Technology, Volume 2, 99-108
  • Murigi .2018, Credit Risk Management and Loan Performance in Microfinance Banks in Kenya; International Journal of Economics, Commerce and Management, United Kingdom Vol. VI, Issue 4.
  • Mwithi, S. 2012. Relationship between credit risk management practices and the level of non-performing loans of micro-finance institutions in Nyeri County, Research paper, School of Business, University of Nairobi.
  • Myers, C. & Brealey, R. 2013. Principles of Corporate Finance. New York: McGraw Hill
  • Nelson, L. 200), Solving Credit Problem unpublished MBA project, University of Nairobi.
  • Nzotta, S.M. 2004. Money, Banking & Finance: Theory and Practice. Nigeria: Hudson – Jude Nigeria Publishers.
  • Owizy, G. 2013. The impact of credit management on financial performance of Nigerian banks, with particular reference to UBA Plc. Journal of Banking and Finance,Volume No: 3
  • Pandey, I. M. 2001. Financial Management, 10th edition. New Dehli: Vikas Publishing House, Pty, Ltd
  • Pike, R. and Neale, B. 1999. Corporate Finance and Investment: Decisions and Strategies. England: Prentice Hall.
  • Ross, S. A., Westerfield, R. W. & Jordan, B. D. 2008. Essentials of Corporate Finance. Hill International edition. USA: McGraw-Hill
  • The Cooperative Societies Act No. 5 .2003. Swaziland Government.
  • The Department of Cooperatives .2014. Cooperative Data Analysis System 2014 Report Presentation.
  • Wamasembe, A. 2002. Credit Information Benefit for MFI’s.The new vision printing, Corporation, Kampala p.34
  • Zikalala, M. J. 2016. The Role of Savings and Credit Cooperatives in Promoting Access to Credit in Swaziland. University of Pretoria; South Africas