Abstract
Savings mobilization is important for rural households in Uganda. This study looked at household net savings deposits in Savings and credit cooperatives (SACCO’s) from individual’s passbooks. Net savings were then measured as the difference between deposits and withdrawals. Weighted least squares were used to determine the factors influencing net deposits. Results indicate that deposits decreased with increase in distance to the SACCO, education levels, wealth, trade activities, and having secondary school dependants. Deposits increased with income, access to credit. SACCO’s are well suited for poor households in terms of products and services offered. There was a higher propensity to save out of transitory income. Key words: SACCO’s (Savings and Credit Cooperatives), savings.
Highlights
BackgroundThere has been significant growth of the microfinance sector over the last 10 years, both in numbers of microfinance institutions and the number of clients that they serve
We proxy the explained part of household participants and non-participants in SACCO programmes
We find that access to credit has a positive and significant influence on the level of net savings deposits held by households
Summary
BackgroundThere has been significant growth of the microfinance sector over the last 10 years, both in numbers of microfinance institutions and the number of clients that they serve. Most of the microfinance institutions are registered as either NGO’s with the NGO Board, as companies under the company’s act, or as savings and credit cooperatives with the ministry of tourism, trade and industry. The microfinance sector has been able to grow fast so as to cater for the financial needs of micro enterprises that the larger financial institutions have traditionally failed to address. This sector is characterized by smaller loans with very short repayment cycles, and most of its services are concentrated in urban and peri-urban centers with limited penetration into the rural areas (MFPED, 2000).
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