Capital structures, and savings and credit cooperative organizations - developing a growth model for Zambia.
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Date
2024
Authors
Milambo, Fidelity
Journal Title
Journal ISSN
Volume Title
Publisher
The University of Zambia
Abstract
Globally, countries are paying attention to the potential of Savings and Credit Cooperative Organizations (SACCOs) as one form of enterprise with a meaningful impact on the economic empowerment of their citizens. Despite SACCOs recording growth in various countries, the growth of SACCOs in Zambia driven by Capital Structure (CS) remains largely under-researched. The main objective of this study was to develop a SACCO Growth Model underpinned by CS. The study area was Lusaka Province. Data were collected from the target population of 59 active SACCOs that had audited financial statements for the period 2017 - 2021. The study was a mixed method, and adopted a multi-paradigmatic position. Epistemologically, the research was objectivist and positivist in paradigm. Ontologically, the study adopted a realist and parmenidean approach. Structured interviews and questionnaire surveys were used to collect data. Qualitative textual data was analysed manually using hierarchical coding frames. Statistical Package
for the Social Sciences (SPSS) Version 26 was used to analyse Quantitative panel data. The results under objective one established growth patterns of increases in capital reserves by 54.5 percent, assets increased by 25.0 percent, membership increased by 149.5 percent; number of employees increased by 31.3 percent; member savings increased by 63.7 percent; retained earnings increased by 33 percent; equity financing increased by 5.0
percent; employee competency increased by 61.9 percent, and 50.0 percent of SACCOs reported increase in dividends. Under objective two, key determinants of SACCOs’ CS at 97.6 percent was through savings, while 78.6 percent attribute profitability as a key determinant. The impact of CS on SACCO growth under Objective 3 revealed that for every 1 percent increase in savings, share capital, and retained earnings, the growth index
increases by 0.17/100, 0.09/100, and 0.00/100, respectively, statistically significant (p value <0.05). A computerized SACCO growth model was developed under objective 4, which revealed that CS was a strong contributor to SACCO growth. The model was validated for usefulness and functionality with select 9 SACCOs. Seamlessly combining results from both methods in building a model was a challenge. The study recommended
inclusion of CSs in SACCOs’ bye-laws, revision of the Cooperative Act of 1998 to prescribe how capital structure should be raised, and a further study on optimal CS mix for SACCOs growth.
Description
Thesis of Doctor of Philosophy in Business and Management.