Abstract:
The study aimed to investigate the determinants of financial performance of primary
SACCOs in Jimma Zone, Ethiopia. The objective of the study was based on six factors: leverage,
liquidity, managerial efficiency, capital adequacy, SACCO size, and age of SACCOs. The total
population of the study was SACCOs in Jimma Zone, and the sample frame selected primary
SACCOs in Jimma Zone. The sample size of the study was 12 primary SACCOs, which were
determined purposively. The study employed a descriptive and explanatory research design.
Secondary data was used for the study, which was collected through document review from the
financial statement and audit reports of the year’s 2018 to 2022 using observation and review as
data collection instruments. E-View 10 was used for secondary data analysis. Inferential
statistics were applied through the use of multiple regression analysis to establish the nature of
the existing relationship between the dependent variable and independent variables.Out of the
six variables incorporated in the model, capital adequacy, size of SACCOs, and age of SACCOs
have a positive and statistically significant influence on the financial performance of SACCOs in
Jimma zone. Managerial efficiency has a negative and significant effect on the financial
performance of SACCOs. On the other hand, liquidity and leverage have positive and
insignificant influences on the financial performance of the SACCOs. The number of primary
SACCOs in Jimma is high in number but they are not as strong, so the study recommended that
to improve the financial capacity of SACCOs by amalgamating different primary SACCOs into
one under the big umbrella. The government official of cooperatives should pay great attention
to continuously supervising, inspecting, auditing, and developing regulatory situations to make
them financially prudent and enhance the development of infrastructures in different areas where
difficulties are being faced on the way to providing financial services
