The Performance Of Financial Cooperative Societies And Networks In Provision Of Products And Services To Rural Communities

Rural microfinance services are essential for development interventions. In many Sub Saharan African countries, financial institutions regard low income earners as too poor, making it difficult for them to access loans and other financial services. According to a World Bank report in 2017, about 40% of the population in Tanzania is excluded from formal financial institutions. The reluctance of the banking sector to reach out to rural dwellers highlights the importance of cooperative societies. Many financial cooperatives provide services such as savings, credits and insurance for their members. Cooperative societies enable development of rural business and land ownership through increased access to affordable loans. They increase household income, ownership of household assets and enterprise assets. They also encourage relationships, develop self-esteem and increase interdependence. They have served as a cost-effective means of providing financial services to those people who cannot access them due to their socioeconomic conditions (Shamma et al., 2015). 2012 was declared international year of cooperatives by the UN. The main objective of this study is to assess the effectiveness of savings and credit cooperatives in service delivery to members and proffer recommendations to enable better outreach.