Financial Change and Performance of Cooperative Credit Unions in Rural Communities of South East, Nigeria

Abstract

This study examined the effect of financial change on the performance of Cooperative Credit Unions (CCUs) in Rural Communities of South East, Nigeria. The study was anchored on the organisational size and structuralist perspective theory propounded by Kimberly (1976). The study employed a survey research design, the population comprised 9209 management committee and members of CCUs. Krejcie and Morgan's 1970 sample size determination formula were employed to ascertain a sample size of 524 participants. The data for the research were sourced through the primary source, and the form of the primary source used was a Likert-structured questionnaire. The study deployed a direct collection method through face-to-face means. The validity of the questionnaire was determined using face and content validity, while the reliability was ascertained using Cronbach's Alpha coefficient (0.848). The data collected were analysed using a combination of descriptive and inferential statistics, and hypotheses tested at a 5% level of significance. The findings from the study showed that financial deepening has a statistically significant effect on ROE (R = .968; R-Square = .936; F statistics = 6569.276; t = 81.051; p-value < .000); that financial service quality is positively and statistically related to employee size (R = .981; R-Square = .963; F statistics = 11629.339; t = 107.839; p-value < .000) and that financial literacy positively and statistically affects members’ satisfaction (R = .975; R-Square = .951; F statistics = 8758.118; t = 93.585; p-value < .000). The study, therefore, concluded that financial change has a statistically significant effect on performance of CCUs in rural communities of South East. Sequel to this, among others, it was recommended that rural CCUs need to implement and refine financial deepening strategies, including optimising liquidity management and diversifying investment options. The study contributes to the model needed to maintain the balance between democracy and organisational efficiency of CCUs practices.