Assessment of Financial performance of Saving and Credit Cooperative Unions: - Through PEARLS

Abstract

The purpose of this study is to evaluate the financial performance of SACCOS in West Shoa Zone, through PEARLS. To accomplish the objective of this study, a quantitative research design was employed. The researchers used secondary data of Waltane SACCO’s audited financial statements that fulfill the criteria of data available from the union’s office covering the period of 2007-2011. PEARLS model of evaluating the financial performance of SACCOS is used to analyze the evaluation of financial performance. The research results show the union is strong regarding the protection of depositors’ money and the effective financial structure of the union indicates mutable results. E1, E5, and E9 are slightly fluctuating above or below the standard. But, E3 and E7 are as per the standard. As the Asset’s quality is concerned, except A3 all selected indicators are strong and in line with the standard. The result show that selected indicators of the Rates of return and Cost are all in line with standard except R4. Liquidity of the union show fluctuating results L1 is up to the standard, L2 is fairly in line with the standard and L3 met the standard only in 2010 and 2011. The result for sign of growth of the union indicates that all selected indicators are in line with the standard except S6. There should be an alternative source of funds for unions to have enough money to provide the loan requirement. The liquidity of the union should also be provided with very careful attention.