Title: Is wholesale lending to SACCOs a win-win encounter?

Authors: Kassim Hussein, Abdullah Makame

Addresses: Bangor Business School, University of Wales – Bangor, Hen Goleg, College Road, Bangor, Gwynned, Wales, LL57 2DG, UK. ' Birmingham Business School, University of Birmingham, Edgbaston, Birmingham B15 2TT, UK

Abstract: Using the case of the CRDB Bank in Tanzania, this study finds that wholesale lending creates a win-win situation for banks, as well as for Savings and Credit Cooperative Societies (SACCOs). Banks minimise costs of lending, widen outreach and |cherry-pick| the best borrowers. SACCOs are able to meet their members| demand for credit, negotiate lower interest rates and produce graduates who can access financial services directly from banks. The bank|s demand for good governance compels SACCOs to develop their capacity so as to attain best practices. Attention to prudentially regulate SACCOs potentially creates financial exclusion.

Keywords: financial exclusion; microfinance; SACCOs; wholesale lending; financial services; Tanzania; Savings and Credit Cooperative Societies; CRDB Bank; financial regulation.

DOI: 10.1504/IJFSM.2008.019670

International Journal of Financial Services Management, 2008 Vol.3 No.2, pp.188 - 199

Published online: 19 Jul 2008 *

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