An investigation into the financial sustainability ofIslamic Saving, Credit Cooperative Society (SACCOS) in Tanzania

PurposeThe purpose of this paper is to assess the financial sustainability ofIslamic Saving Credit Corporative Society (SACCOS) and the factor(s)affecting their financial sustainability in the Tanzanian context.Design/methodology/approachThe data set used in this study comes from four SACCOS audited financialreports from the year 2010 to 2014 and from interviews with SACCOS’smanagement.FindingsThe study found that the IMFIs in Tanzania are not financially sustainable.Additionally, having responsible staff members, regular review of financialguidelines, education to members, cooperation between employees andmanagement and staff training are found to be highly contributing factorstowards SACCOS’s financial sustainability. Moreover, the findingsreveal that depending on the single source of income, i.e., charges onmembers contributed much in these SACCOS’s not being financiallysustainable.Researchlimitations/implicationsOnly two available registered Islamic SACCOS was used. Additionally,conventional SACCOS have been in service provision for a long time ascompared to Islamic ones; hence, caution must be taken for comparisonpurposes.Practical implicationsBased on these findings, the Islamic SACCOS needs to initiate productiveprojects that can enable them to have other income sources apart fromcharges on members.Originality/valueThis study traces the financial trend of Islamic SACCOS in Tanzania since itsestablishment in 2010. Such trace enables Islamic SACCOS and otherstakeholders to be aware on the financial progress of Islamic SACCOS and actaccordingly to ensure sustainability.