Corporate governance and financial performance of SACCOs in Lango Sub Region.

Abstract

This research was aimed at looking at Corporate Governance, and financial performance of SACCOs in Lango sub region in Lango sub region, Northern Uganda. Some of these SACCOs have come under spotlight for cases of mismanagement and a number of them have closed. The research set out to: establish the level of compliance with corporate governance guidelines, determine the relationship between corporate governance and risks, examine the relationship between risks and financial performance, as well as examine the relationship between corporate governance and financial performance of SACCOs in the Lango sub region.

To undertake this study, a sample of 63 was drawn from a population of 75 SACCOs in Lango sub region and a questionnaire distributed to each of the SACCOs, collected and analyzed. Findings revealed majority of the SACCOs had operated for a period up to four years only and none of them operated in more than 5 branches. A significant number of SACCOs were found to comply less with corporate governance guidelines, risk was found to be weakly and negatively correlated with corporate governance and financial performance where as corporate governance and financial performance were found to be strongly positively correlated.

The study concluded that less compliance with corporate governance as well as high risk levels may explain the relatively poor financial performance of these SACCOs. SACCOs were therefore advised to create awareness amongst the members regarding their rights as well as encourage SACCOs to implement and adhere to corporate governance principles, process and procedures among others. Further research should be done in corporate governance guideline implementation and Lending models among SACCOs.