Abstract
This study aimed to assess role and determinants of saving and credit cooperative on financial intermediation in Hadiya Zone, in case of Lemo woreda and Hosanna town administrative. The main target of this study was in order to assess role of saving and credit cooperatives for their members in financial intermediation and to examine main determinants of saving and credit cooperatives activities on financial intermediation. Both primary and secondary data were used, the primary data was collected through structured questionnaire based on 156 members’ respondents of cooperative and 156 respondents from saving and credit cooperative total 312 respondents from both Lemo Woreda and Hosanna town. Secondary data were collected from all saving and credit cooperatives and other relevant organizations those from Lemo woreda and Hadiya zone cooperative and marketing organization. Data analysis is carried out with the help of various descriptive and econometric techniques that logit model. Descriptive method was employed to assess role of saving and credit cooperatives in financial intermediation and logit model were employed to identify determinants that influence their financial intermediation role on members. Analysis result implies that saving and credit cooperatives have significant role on their member’s resource mobilization or to enhance saving culture, creating credit provision on moderate financial intermediation. In case of factors that determine financial intermediation of cooperatives member’s participation on cooperatives, different training especially for cooperative administrative, sufficient supervision and audit system, and political disturbance or intervention on their objectives significantly influence financial intermediation performance.
Highlights
Savings and credit cooperative societies (SACCOs) in the world can be traced based on two origin of modern cooperation
On the other had a significant majority 30 (19%) of the respondent of SACCOs members had been in their respective SACCOs for less than 5 years with 84 (54%) have been members for a period of between 5-10 years, 25 (17%) have been 11-15 years, whereas 11 (7%) had been in the organizations for more than 15 years
The chapter looks at the conclusions drawn from the research, comparison to what other scholars say as noted under literature review and what recommendations the study has come up with in the role and determinants of savings and credit cooperative societies (SACCO’s) in financial intermediation
Summary
Savings and credit cooperative societies (SACCOs) in the world can be traced based on two origin of modern cooperation. The first modern co-operation emerged in certain working class environments in European industrial cities in 1840 in Great Britannia and France. The pioneers invented model of consumer and labor cooperatives that defend and promote the interest of working class in the face of social disasters endangered by the industrial revolution [1]. Tradition cooperation involved community members voluntarily pooling financial resources through "Iqub", which was an association of people having the common objectives of mobilizing resources, especially finance, and distributing it to members on rotating basis. There were initiatives for labor resource mobilization that were to overcome seasonal labor peaks, known as “Jigie”, “Wonfel”, Idir, among others. Modern cooperatives in Ethiopia were started at the time of Emperor Haile Sellassie in 1961 by Decree No 44/1961 and later on a proclamation were enacted on 1966, with in short comings, this legal ground gave inputs for cooperative development in the country (Federal Cooperatives Agency, 2012)
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