Unlocking the relationship between financial management practices and financial sustainability of savings and credit cooperative societies in Tanzania

Financial management practices (FMPs) play a fundamental role in organisational financial outcomes. However, limited empirical evidence exists on the linkage between integrated FMPs and financial sustainability (FS) of savings and credit cooperative societies (SACCOS) across developing economies. To address this gap, the current study examines the linkage of FMPs covering working capital practices (WCP), financial reporting practices (FRP), and capital structure management practices (CSMP) on SACCOS’ FS. Data from 228 SACCOS managers were collected using self-administered questionnaires and a cross-sectional research approach. Partial least squares structural equation modeling (PLS-SEM) analysis demonstrates strong explanatory power (R2 = 0.599), with all WCP, FRP, and CSMP significantly and positively associated with SACCOS’ FS. It implies that the SACCOS position better for achieving FS by implementing combined WCP, FRP, and CSMP. Accordingly, SACCOS Board and management should consider WCP, FRP, and CSMP within their financial policies and strategic management procedures, by implementing them jointly to strengthen FS. For policymakers and umbrella organisations, the study argues for enforcing and empowering SACCOS to adopt these FMPs to achieve financial stability and members’ welfare, thereby supporting SDGs’ attainment. The study also extends the body of knowledge in Positive Accounting Theory by elucidating the mechanism by which shared FMPs predict FS in financial cooperatives in emerging economies.