The Influence of Leadership, Corporate Governance and Regulations on Credit Risk Management: The Study of Rural SACCOS from Tanzania

This paper uses data from 37 rural SACCOS in Morogoro, Dodoma and Kilimanjaro regions in Tanzania obtained from the survey conducted between February and May 2013. The study investigated quantatively and descriptively the influence of leadership, corporate governance and regulations on credit risk management in rural SACCOS. This study finds that good leadership, corporate governance and regulations are essential for effective credit risk management in rural SACCOS. The study further revealed that 65%, 54%, 46%, 38% and 98% of rural SACCOS affirmed the presence of good re-elected leaders, effectiveness in loans collection, presence of creativity and innovating among leaders, annually audited reports and the presence but not printed and distributed to members of their by-laws respectively. This paper recommends that the rural SACCOS should practice the good leadership, governance and should abide by their by-laws in order to have the effective credit risks management. Also the government should regulate the rural SACCOS very stringently and the political interference should be avoided.