Demographic Variables Influence on Household Participation on Small Savings in Indigenous Voluntary Organisations at Wolaita Sodo Town, Ethiopia

Godi Sudhakar

doi:10.7176/ejbm/11-1-08

Abstract

Savings and credit scheme aims at poverty alleviation to the poor and low income families. Equb, Mahiber and Eddir are very old traditional institutions and indigenous voluntary organisations in Ethiopia that maintain their importance up to till today. Informal financial institutions such as Rotating Savings and Credit Associations (ROSCAs) and their participants have received growing attention over the last two decades. They become even more and more relevant as time goes on and as the economy becomes stronger. This study assessed the influence of demographic factors of saving behaviour of the household members of Wolaita Sodo town, Ethiopia. The study has been conducted on the basis of the primary data collected through structured questionnaire. The data was collected from 385 household who participate in the small savings survey at 95% confidence level. Judgemental sampling technique was used to choose the respondents. Questionnaire was prepared using five point Likert scale to measure the response on continuous scale. Descriptive and inferential statistics were used as data analysis tool. The analysis of variance of demographic variables on household participation on small savings showed that gender, marital status and educational status were statistically insignificant to predict the household participation on small savings whereas Age, expenditure factor, level of income and family size were statistically significant to predict household participation on small savings. Keywords: Financial Institutions, Interest Rate, Behaviour, Credit, Mobilization, Savings DOI : 10.7176/EJBM/11-1-08

Highlights

OF THE STUDY The formal financial institutions have extensive infrastructures and system, strong management capacity, access to funds, yet they are further removed from rural investors making obtaining adequate information and enforcing contracts imperfect and costly
The distribution of credit by government owned or sponsored rural financial institutions have frequently been skewed in favor of the wealthier and more influential farmers
H6: Family size of the member has significant relationship with household participation on small savings Educational Status In Ethiopia saving and credit cooperatives initially emerged through some scholars and urban employees

Summary

BACKGROUND

OF THE STUDY The formal financial institutions have extensive infrastructures and system, strong management capacity, access to funds, yet they are further removed from rural investors making obtaining adequate information and enforcing contracts imperfect and costly. H6: Family size of the member has significant relationship with household participation on small savings Educational Status In Ethiopia saving and credit cooperatives initially emerged through some scholars and urban employees. The result of analysis states that there is statistically significant difference of household participation on small savings based on respondent’s Income factor since its P value is 0.000 which is

CONCLUSION AND RECOMMENDATIONS

Findings

Within Groups