Marketing strategy and financial performance of savings and credit cooperative organizations: evidence from Kyamuhunga Peoples SACCO, Uganda

Abstract

Background Savings and Credit Cooperative Organizations (SACCOs) in Uganda continue to record high non-performing loan ratios and governance weaknesses despite sustained capitalisation. Marketing strategy is a contested determinant of financial performance in the wider literature, with prior evidence drawn mainly from corporate and Asian firms rather than member-owned rural cooperatives. This study tested whether marketing strategy affects the financial performance of Kyamuhunga Peoples SACCO (KYAPS), Bushenyi District, Uganda. Methods A cross-sectional, correlational design was used. A structured, five-point Likert questionnaire was self-administered to 179 randomly and purposively sampled management staff, field agents, and customers of KYAPS; 167 respondents returned usable questionnaires (93.3% response rate). Marketing strategy was measured with six indicators (communication channels, campaign clarity, innovativeness, promotional activity, feedback mechanisms) and financial performance with six indicators (profitability, liquidity, member satisfaction, efficiency). Data were analysed using descriptive statistics, Pearson correlation, and ordinary least squares regression (simple and multiple), with normality, linearity, homoscedasticity, and multicollinearity formally tested. Results Marketing strategy was positively and significantly correlated with financial performance (r = 0.373, p = 0.001 < 0.05). A simple regression showed marketing strategy alone explained 13.9% of variance in financial performance (R 2  = 0.139, F(1,165) = 26.71, p = 0.001 < 0.05; β = 0.373). The effect remained significant when product design and incentive strategies were added as covariates (β = 0.322, t = 5.79, p = 0.001 < 0.05; full-model R 2  = 0.502). Diagnostic checks supported the robustness of the estimates (VIF = 1.01; Durbin–Watson = 1.93). Conclusions Marketing strategy has a statistically significant, positive, and robust effect on SACCO financial performance, independent of product design and incentive strategies. SACCO managers should treat marketing as a discrete, resourced performance lever rather than an ancillary communication function.