An appraisal of the status of savings management through cooperative credit unions in Lesotho

The findings of this study are based on credit‐supply operations of cooperative credit unions in ten administrative districts of Lesotho for the period 1982–92. The credit‐extension activities of the cooperative credit unions were appraised by statistically analysing the loans these institutions have extended to their members over the study period. The response of loans granted to members’ share deposits, outstanding loans, selected macroeconomic variables, number of credit unions, membership and value of assets was also statistically appraised. The results displayed a significant correlation between loans granted to members, their share deposits, the number of cooperative credit unions, membership, value of assets and outstanding loan balance. At the macroeconomic level, loans granted to members in any given year showed a significant correlation with the interest rate on savings, GNP per capita, salary remittances from migrant workers, and the prime lending interest rate of commercial banks. The amount of loans granted was found to be elastic to changes in GNP per capita, salary remittances from migrant workers, government budget deficit or surplus, commercial bank lending, share deposits by cooperators, value of assets held by credit unions, and unpaid loan balance.

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Lecturer, Department of Business Administration, National University of Lesotho.