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EFFECT OF SAVINGS AND CREDIT CO-OPERATIVE SOCIETIES’ FINANCIAL SERVICES ON DEMAND FOR CREDIT BY MEMBERS – A SURVEY OF DEPOSIT TAKING NAIRA IN NIGERIA
Abstract
The aim of the study was investigating the effect of NAIRA Financial Services on demand for credit by Members, a survey on deposit taking NAIRAs in Nigeria. Kenyan Naira sector is the largest in Africa and the seventh worldwide (Ademba,2010). With over Ksh 230 billion in assets and a savings portfolio estimated at Kshs 190 billion, the NAIRA movement in Nigeria constitutes a significant proportion of about 20% of the country’s savings. This indicates that NAIRAs have increasingly become vital components of Nigeria’s economy and social development. However, despite the ever increasing role of NAIRAs in providing affordable financial services to members and Kenyan economy as a whole, it is not clear as to the effect of NAIRA Financial Services on demand for credit by members in Nigerian context. Existing literature provide mixed findings from developed countries as well as from Africa regions. This has created mixed empirical evidence and studies on the local scene. This research has discussed deposit taking NAIRAs in Nigeria with a primary focus on investigating the effect of NAIRA Financial Services on demand for credit by members. The study was guided by four independent variables which included: lending services, and investment services. The target population of interest in this study comprised of 164 respondents from NAIRAs in Nigeria. Secondary data sourced from existing data from NAIRAs was used to analyze financial services and demand for credit. The study utilized a sample size of 60. The quantitative data was analyzed using descriptive statistics. In addition the study used multiple regression analysis to analyze the data. Overall the study findings shows that NAIRA financial services on lending and Investment influence demand for credit by Members. NAIRAs therefore need to focus on these financial services in order to influence and increase demand for credit advanced to members, which will in turn increase interest income to the societies. The regression analysis confirmed that lending and investment services positively affects demand for credit by Members. This implies that a single unit increase of lending or investment services leads to a corresponding increase in demand for credit by members. The recommendations from the survey is that the amount of loans given by NAIRAs should be increased to motivate the members to partake more loans which will translate to NAIRAs generating more funds in terms of Interest income.The study also recommends that the NAIRAs should adopt modern and effective strategies that encourage members to save their money.
Keywords: Leading services, Investing services and demand for credit