A Factors Analysis of Saving Cooperatives’ Financial Stability in Northern

Abstract

        The purpose of this research was it to analyze factors of Saving Cooperatives’ financial stability in Northern Thailand. The CAMEL Analysis concept was used to extract financial stability factors. Data was collected from the financial reports of Saving Cooperatives in Northern Thailand, including 16 province and 170 cooperatives. Purposive sampling was used to sample 158 cases from the populations. From the research result it can be five stability factors summarized as follows: (1) capital adequacy, (2) asset quality, (3) management competency, (4) earning ability and (5) liquidity. It was also found that those factors could explain 81.9 percent of the total variance. The financial ratios analysis of Saving Cooperative in Northern Thailand showed that in average capital adequacy, asset quality and liquidity were better than for Saving Cooperative countrywide. In contrast, the average financial ratios of earning ability and management competency, especially, savings per member and profit per member were lower than for Saving Cooperative countrywide.  The result generated using stepwise discriminant analysis showed that only three variables could be discriminated: the (1) capital adequacy, (2) growth in assets and (3) the growth in reserves as well as the growth in other reserves. The Wilks' Lambda for the growth of assets is 0.678.  The Wilks' Lambda for the growth in reserves as well as the growth in other reserves are 0.31 and 0.481, respectively. The testing of the predictive equation showed that the financial stability of Saving Cooperatives in Northern Thailand could be projected with high accuracy. It was found that the predictive equation was able to accurately predict 83.3% of financially unstable cooperatives and 98.7% of financially stable cooperatives. Overall, it was found that the predictive equation was accurate for 98.1% of cooperatives.