Saving and Credit Cooperatives (SACCOs) are the main financial solution of the people who have low income level. But they have their own challenges that retard their financial solution to their members and the economical contribution to a country. In Kalu Woreda, the development of SACCOs is low due to the existence of different challenges. The research design is cross sectional descriptive research. Primary and secondary sources of data were used. Stratified systematic random probability sampling methods were employed to select the sample respondents. The collected data were analyzed by descriptive statistical methods & simple index model analysis methods. Lack of knowledge and capacity of management committees and poor members’ participation, lack of transparency and accountability, lack of appropriate support from cooperative promoters and NGOs, and non awareness of the existing opportunities by the members are the main findings. Providing member driven services, providing appropriate training, education, and information to all stakeholders, and recommending Micro Financial Institutions to give up their unfair competition with cooperatives are the possible recommendations.
Key words: challenges, prospects, saving, credit, and cooperatives.
Table of Contents
1. Introduction
1.1. Background of the Study
1.2. Statement of the Problem
1.3. Objectives of the Study
1.3.1. General Objective
1.3.2. The Specific Objectives
1.4. Research Questions
1.5. Scope of the Study
1.6. Significance of the study
1.7. Definition of Terms and Concepts
1.8. Limitations and Problems of the Study
1.9. Organization of the Report
2. Literature Review
2.1. Introduction
2.2. Review of Theoretical Studies
2.2.1. Concept of Cooperatives in General and SACCOs in Particular
2.2.2. Cooperative Values and Principles
2.2.3. The Role of SACCOs in Poverty Alleviation
2.2.4. Theoretical Problems of Saving and Credit Cooperatives
2.2.5. Theoretical Challenges of SACCOs in Financial Transactions
2.2.6. Cooperative Movement in Ethiopia
2.2.7. The Role of SACCOs in Kalu Woreda
2.3. Review of Empirical Studies on the challenges and prospects of SACCOs
2.3.1. Empirically Observed challenges or problems of SACCOs
2.3.2. Empirical Studies Conducted on the Challenges & Prospects of SACCOs in Ethiopia
2.3.2.1. Studies on Internal and External Challenges of SACCOs
2.3.2.2. Studies on Challenges of Members Participation in SACCOs
2.3.2.3. Challenges of SACCOs to Provide the Required Services
2.3.2.4. Studies on Prospects of SACCOs
2.4. Summary of the Review of Related Literature
3. Methodology
3.1. Description of the Study Area
3.2. Research Design and Approach
3.3. Population, Sample Size and Sampling Technique
3.3.1. Population
3.3.2. Sample size and Sampling Technique
3.4. Types and Sources of Data and Data Collection Methods
3.4.1. Types and Sources of Data
3.4.2. Data Collection Instruments
3.5. Data Collection Procedures
3.6. Method of Data Analysis
3.7. The Narrative Structure and Ethical Issues
3.8. Variables in the Study
4. Results and Discussions
4.1. Introduction
4.2. Demographic Characteristics of Respondents
4.2.1. Sex of the Respondents
4.2.2. Age of the Respondents
4.2.3. Family Size of the Respondents
4.2.4. Marital Status of Respondents
4.2.5. Religion of the Respondents
4.2.6. Educational Status of the Respondents
4.2.7. Occupational Status of the Respondents
4.2.8. Membership Duration in SACCOs?
4.3. Challenges and Prospects of SACCOs
4.3.1. Internal & External Challenges on the Performance of SACCOs’
4.3.2. Challenges of Members’ Participation
4.3.3. Challenges of SACCOs during Services Delivery
4.3.3.1. Transparency & Accountability during service delivery
4.3.3.2. Perception of Members’ Satisfaction on the Following Services
4.3.3.3. Perception of Members on the loan processing and Repayment period
4.3.3.4. Perception on Continuous Consultation & Training Services
4.4. Prospects of SACCOs
4.5. Support of SACCOs’ Promoters and NGOs
4.6. Interview Results about Challenges and Prospects of SACCOs
4.6.1. Interview Result about Challenges of SACCOs
4.6.2. Interview Result about the Prospects of SACCOs
4.7. Summary of the Individual Respondents and Discussion Groups
5. Conclusions & Recommendations
5.1. Introduction
5.2. Conclusions
5.3. Recommendations
5.4. Suggestions for Future Research
Research Objectives and Focus
The primary research objective of this study is to identify the internal and external challenges faced by Savings and Credit Cooperatives (SACCOs) in Kalu Woreda, South Wollo Zone, Ethiopia, and to examine their prospects for future development. The study seeks to address how these cooperatives can improve member participation, service delivery, and financial viability to better serve their low-income members.
- Identification of internal and external operational challenges.
- Assessment of factors influencing members' participation in cooperative activities.
- Evaluation of service delivery quality, including loan processing and training.
- Analysis of future prospects and strategic opportunities for SACCOs.
Excerpt from the Book
2.2.6. Cooperative Movement in Ethiopia
The idea of cooperation is not new for Ethiopian women and men. From this point of view, working together in cooperatives would be in line with local tradition in our country. In rural Ethiopia people are helping each other during stress and strain through their traditional cooperatives such as Debo, Idir, and Ekub, etc. (Selvan, 2003).
According to Dejene Aredo (1997: 227), the modern cooperative movement started in Ethiopia during the Imperial period. National Community Development was responsible for the formation and promotion of cooperatives in Ethiopia during this time. Over 50 years have been counted since the modern SACCOs came into existence in Ethiopia. The first period to the emergence of modern SACCOs was during the Emperor Haileselassie ruling period in 1961. Although, saving and credit institutions play a crucial role in rural development. However, these institutions are limited to urban areas in our country, Ethiopia. Only less than 2 percent of the rural households have bank deposits. The majority of the rural people rely on the informal financial sector (i.e. Idir, Ekub, money lenders, friends and relatives) for their credit requirements.
According to SIDA (1996) Savings and credit cooperative systems in Ethiopia have a history of instability. Savings and credit cooperatives are often supervised by cooperative promotion agency at federal level and cooperative promotion office in Woreda level that are responsible for all kinds of financial and non-financial cooperatives. But such agencies are in a challenge (societies are not easily organized in the form of SACCOs, lack of awareness creation, and even the organized members are not actively participated) to create a tremendous change.
Summary of Chapters
Chapter One: Introduction: Outlines the background of Savings and Credit Cooperatives (SACCOs), the problem statement, research objectives, and the scope of the study within Kalu Woreda.
Chapter Two: Literature Review: Examines theoretical foundations of cooperatives, global and local movement perspectives, and empirical studies regarding challenges and prospects of SACCOs.
Chapter Three: Methodology: Details the descriptive research design, population and sampling techniques used to collect data from ten selected SACCOs in Kalu Woreda.
Chapter Four: Results and Discussions: Presents an analysis of primary and secondary data regarding the demographic profile of respondents, organizational challenges, and member participation levels.
Chapter Five: Conclusions & Recommendations: Synthesizes research findings to provide actionable recommendations for government bodies, promoters, and SACCO stakeholders to improve operational performance.
Keywords
SACCOs, Savings, Credit, Cooperatives, Kalu Woreda, Member Participation, Financial Inclusion, Poverty Alleviation, Governance, Capacity Building, Ethiopia, Rural Development, Challenges, Prospects, Transparency.
Frequently Asked Questions
What is the core focus of this thesis?
This thesis examines the challenges and prospects of Savings and Credit Cooperatives (SACCOs) specifically within Kalu Woreda in the Amhara Region of Ethiopia.
What are the primary thematic areas covered?
The research explores internal and external operational challenges, levels of member participation, effectiveness of service delivery, and the future development opportunities for these financial institutions.
What is the ultimate goal of the study?
The goal is to provide a critical assessment of why SACCO development has been low in the region and to recommend feasible strategies to improve their performance and sustainability.
Which scientific methodology was employed?
The study utilizes a cross-sectional descriptive research design, incorporating both qualitative and quantitative data collected through questionnaires, interviews, and systematic sampling.
What does the main body of the work address?
The main body investigates the internal and external impediments to performance, evaluates the impact of member demographics on participation, and analyzes transparency and accountability within the management committees.
Which keywords define this work?
Key terms include SACCOs, financial inclusion, poverty alleviation, member participation, cooperative governance, and rural economic development in Ethiopia.
How does religious belief impact SACCO participation in Kalu Woreda?
The study identifies that Muslim religion followers often have reservations about interest-based transactions, which presents a specific challenge to the adoption of standard SACCO credit models in the region.
What role do NGOs and government promoters play in these cooperatives?
While intended to support institutional capacity building, the study finds that support is often insufficient, non-technical, or based on unrealistic promises, leading to dependency rather than self-sufficiency.
- Arbeit zitieren
- Ergetew Temeche (Autor:in), 2014, Challenges and prospects of saving and credit cooperatives in South Wolo Zone, Amhara Region, Ethiopia, München, GRIN Verlag, https://www.grin.com/document/284706
