Abstract
4 The use of Cooperative Financial Institutions (CFIs) as an effective tool for grassroots 5 innovation in developing local sustainable development is proving successful.. This 6 paper reviews the literature on CFIs in South Africa using a qualitative research 7 approach drawing on both interviews and a systematic review of literature focusing 8 on the performance of CFIs. The review is based on 10 manuscripts that met the study 9 inclusion crititeria ffrom a total of 103 manuscripts. The review was supplemented by 10 an interviewof 3 purposively selected CFI leaders. The databases used for the search 11 were: Emerald, African Journal Archive (A Sabinet Gateway Project), Sabinet, other 12 articles were obtained through Google search using the key search terms. The study 13 found that CFIs play significant roles in improving their members' social and financial 14 well-being. Younger developing CFIs have lower productivity in operations 15 compared mature ones. The study also found that a CFI's productivity and 16 performance could be improved if theywork towards achieving financial 17 sustainability through cost reduction strategies, credit risk management and reduced 18 dependency on grant funding. The paper recommends that leader of CFIs deploy 19 quality techniques such as Total Quality Management and customer-oriented 20 techniqueto improve member satisfaction and to be competitive in the financial sector. 21 Furthermore, the industry should think about factor contributing decreasing 22 investment and asset allocation and enhance its managerial skills, technological 23 adoption, governance frameworks, and public image. 24 25