Responses of AFYA Co-operative Society Limited to non-performing loans
Mathenge, Sylvia N
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Economic reforms have been sweeping the whole world affecting Europe, Africa and other parts of the world. Such reforms have created a fundamental change in the environment in which firms operate. An obvious manifestation of such changes is the liberalization of trade. Such liberalization meant that cooperative societies had to contend with the unbearable competitive pressures. This study set out to document the responses of Afya Cooperative Society to non-performing loans. The objective of this study was to highlight the causes, effects and responses of Cooperative Society Limited to non- performing loans. A case study approach was used to get an in depth insight of the study. Primary data was collected and closed ended questionnaires were used. The collected data was analyzed and interpreted in line with the objective of the study. The research findings showed the importance of management in responding quickly to non-performing loans since granting of loans is the core business of the cooperative. The existence of too many non-performing loans affects the performance and survival of the organization. By undertaking various strategic responses Afya Cooperative Society was able to tackle the problem of nonperforming loans. Such responses include upgrading of Information Technology systems, training of staff, offering proper incentives and pursuing a legal and legislative framework to counter unfair completion. Marketing practices were also found to be important in releasing relevant information to clients and market the societies‟ products. In conclusion, for an organization to be able to be viable in a liberalized economy, it has to critically take into account internal and external factors on a continual basis and be proactive in responding to unforeseen and foreseen threats and capitalize on its strengths due to increasing competition in the global market.