Influence of Information Symmetry Management on Loan Portfolio Quality for Savings and Credit Cooperative Societies in Tanzania

Abstract

The study aimed to analyze the effect of information symmetry management on loan portfolio quality for Tanzania savings and credits cooperative societies (SACCOS). The specifically the study established the role the information policies, guideline and procedures, borrowers’ information verification and MIS usage on the loan portfolio quality of SACCOS. Data were collected randomly from 145 SACCOS using a structured questionnaire. An ordinary least square multiple regression analysed the data. The findings indicated that the information policies, guideline and procedures, the borrowers’ information verification and MIS usage influenced positively and significantly the loan portfolio quality of SACCOS in Tanzania. Based on the findings, SACCOS in Tanzania should prioritize developing and implementing robust information policies, guidelines, and procedures. Additionally, enhancing borrowers' information verification processes and maximizing the utilization of Management Information Systems (MIS) are crucial for improving SACCOS loan portfolio quality and overall financial performance. The study's findings contribute to agency theory by highlighting how effective information management practices, including policies, guidelines, and borrower verification, and MIS utilization, can mitigate information asymmetry and align incentives between lenders and borrowers. The practice is vital for promoting SACCOS' loan portfolio quality in Tanzania.

Keywords: Information symmetry management, loan portfolio quality, savings and credits cooperative societies (SACCOS), Tanzania