Determinants Of Credit Utilization Practices Of Selected Saving And Credit Cooperatives Members: A Case Kokosa District West Arsi Zone, Oromia Regional State, Ethiopia

Abstract

Savings and credit cooperative societies have been seen as the most appropriate institution to serve rural farmers and contribute to poverty reductions and rural development. However, members of saving and credit cooperatives were not uniformly productive and used credit. This study aims to assess the determinant of credit utilization practice of saving and credit cooperatives members of Kokosa District, West Arsi zone Oromia Regional State, Ethiopia. In this study description and explanatory research of design as well as mixed types of research approach and multistage sample was employed. By using Yamane's (1967) formula total sample size of 134 members of saving and credit cooperatives was selected randomly. Instrument data collection semi-structure questionnaire face to face interview respondents, key informant interview, focus group discussion, and secondary data were supplementary to primary data also collected from respective selected saving and credit cooperatives in the study area. To analyze, the data researcher used descriptive and binary logistic regressions were employed based on facts regarding the data collected. Descriptive statistics such as frequency, mean, standard deviation, and percentage and also, inferential statistics such as t-test and chi-square were used for analyzing the data. Out of the total sample respondents, 81 were good credit utilization practices and 53 of the respondents were not good credit utilization practices. As well as binary logistic regression model was employed to identify the effect of determinants on credit utilization practice finding variables gender, marital status, education level, training, credit appraisal, amount of credit received and total annual income were positively significant. While age and interest rate also have negative significance. Besides, total annual income and amount of credit received were key significant determinants of credit utilization practices selected saving and Credit Cooperatives. Recommended there is a need for investment in the attitudinal change in men and women to reduce gender differences within the household concerning credit utilization. There is also required for education and training to strengthen their members to utilize credit properly for acquired purposes especially, for production, investment, and income-generating activities rather than consumption