Weak Internal Governance in SACCOS

TLDR

• Perhaps the most consistently cited problem, however, is weak internal governance.
• Beyond institutional weaknesses, borrower behaviour has also contributed to SACCOS failures.
• Common weaknesses included poor record-keeping, irregular reporting, inadequate credit appraisal, weak internal controls and failure to build adequate loan-loss provisions or maintain sufficient liquidity buffers.
• Many societies operated for years with limited on-site inspections, inconsistent auditing and weak consequences for breaches of lending or governance requirements.