The Role Of Savings And Credit Cooperatives In Improving Livelihoods Of Members: The Case Of Ambo Town, Oromiya Regional State, Ethiopa

Abstract

The main objective of this study was to assess the role of saving and credit cooperatives in improving livelihoods of members in Ambo Town, Oromia Regional State, Ethiopia. The study was based on three specific objectives that such as: to investigate the SACCO’s activity in improving the livelihoods of members in the selected area; to examine the benefit of SACCO’s in improving the livelihood of members in the study area and to identify the major challenges that affect SACCO’s in improving livelihoods of members in the study area. Descriptive research methodology was used to determine appropriateness of the methods. Descriptive research design was conducted from July 2020 – June 2021. Purposive sampling technique was adopted to select 157 samples form 7 primary SACCO’s members and 146 research participants was involved in the study. Secondary data was collected from Ambo Town Cooperative promotion office. Data collection was done using questionnaire, interviews, and focus group discussion (FGD) and observation methods was employed as the main research instruments. Quantitative data was analyzed with help of SPSS Version 25.0 was used. Finally, the responses of the respondents from questionnaire were analyzed using descriptive Statistics and data was summarized using mean and standard deviation while categorical data were summarized using frequency and percent. The quantitative results were presented using tables and figures and qualitative data and was presented in narrative method. The result showed that SACCO’s services can promote members saving habits, SACCO’s credit service can enable members to start a new business, increase household ownership, positive increase in diet per day, promote asset increase, and construct house, education and health. The study concludes that SACCOS has positive impact on saving mobilization, credit service, income, food security, assets, education, health, business capital. Despite these strengths there are existing challenges that limit its proper utilization include lack of training and cooperative knowledge in income generating and financial management, small loan size to get reasonable amount of credit, unable to get government support. This study recommends that continuous training and education for members and committees, the government should closely supervise SACCOS so as to increase their contributions on livelihood improvement and finally the Current saving policies needs to accord more attention to SACCOS and focus on education and training and recognize SACCOS are financial institutions and adopt special legislation that specifically focus on SACCOS.