Title:
Effect of Internal Control on Financial Performance of Savings and Credit Cooperative Societies (SACCOS) in Tanzania: A Case of Nyamagana District, Mwanza Region

Authors:
William Evans , Dr. Ann Kathomi & Dr. Kaihula P. Bishangazi, Tanzania

Abstract:

This study examined the Effect of Internal Control on Financial Performance of Savings and Credit Cooperative Societies (SACCOS) in Nyamagana District, Mwanza Region, Tanzania. The study employed a quantitative approach using an explanatory cross-sectional research design guided by Agency Theory. A census of 150 respondents was drawn from ten financial SACCOS operating in Nyamagana District, including managers, accountants, loan officers, board members, and supervisory committee members. Data were collected using structured Likert-scale questionnaires and supported by audited financial statements. The reliability of the research instrument was confirmed using Cronbach’s Alpha coefficient above 0.85. Data were analyzed using descriptive statistics, Pearson correlation, and Ordinary Least Squares (OLS) regression, with diagnostic tests conducted to ensure normality, multicollinearity, heteroscedasticity, and autocorrelation assumptions were satisfied. The findings revealed that risk management practices have a positive and statistically significant effect on the financial performance of SACCOS. Institutions with well-established risk identification, assessment, monitoring, and mitigation mechanisms demonstrated higher profitability, improved liquidity, and stronger loan repayment performance. The study concludes that effective risk management enhances financial sustainability in SACCOS. It recommends strengthening enterprise-wide risk management frameworks, improving credit risk monitoring, and aligning risk policies with regulatory requirements. Strengthening risk management systems can enhance the stability of SACCOS, safeguard members’ savings, and promote financial inclusion in Tanzania.

DOI: https://doi.org/10.51505/IJEBMR.2026.11004