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Original research
MEMBER TRUST AS A MEDIATING MECHANISM: INSTITUTIONAL GOVERNANCE AND SUSTAINABILITY IN SAVINGS AND CREDIT COOPERATIVES (SACCOS) IN MALAWIPages 193-206
Abstract
The paper aimed to establish the role of member trust as a mediating factor between governance and SACCO sustainability in Malawi. The explanatory sequential mixed methods design was applied, and the data were gathered from 297 respondents, 12 semi-structured interviews, and several secondary sources. The study revealed that the governance scores were higher for stable SACCOs (M=4.02) than for unstable SACCOs (M=2.47). Similarly, the level of trust was higher for stable SACCOs (M=4.23) than their unstable counterparts (M=2.49). Moreover, there was a significant difference in trust levels between male and female members, with females reporting slightly lower levels of trust than males (3.28 vs. 3.45; p < 0.05). The study also identified accountability as the most critical governance aspect that predicts SACCO sustainability. The mediation analysis conducted demonstrated that governance predicted sustainability both directly and indirectly (indirect effect=0.46; 95% CI [0.33,0.60]) and explained 58% of the variance. Trust was a significant predictor of the level of deposits, repayment behavior, and compliance with SACCO rules. In addition, weak accountability, elite capture, and communication challenges were found to negatively affect sustainability. Overall, the study concluded that governance is not sufficient in itself to promote SACCO sustainability and proposed further reforms and longitudinal studies to improve cooperative governance in Malawi.
Keywords:
SACCOs, governance, member trust, sustainability, accountability.
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Marko Mandala Nkhoma, 
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