The influence of village saving & loan association service on household welfare in Awei sub-county, Alebtong district. A cross-sectional study.

Samuel   Munu; Muhamad Ssendagi

doi:10.70572/agp.v2i6.104

Authors

Samuel Munu School of Research and Graduate Studies, Team University.
Dr. Muhamad Ssendagi School of Research and Graduate Studies, Team University.

DOI:

https://doi.org/10.70572/agp.v2i6.104

Keywords:

Village Saving and Loan Association (VSLA), Household Welfare, Financial Inclusion, Community Development, Rural Livelihoods, Awei Sub-county, Alebtong District

Abstract

Background.

The Ugandan Government supported the establishment of Village Group Savings Cooperatives as a means of providing financial accessibility to rural Ugandans who cannot afford large loans from banking institutions to support their micro businesses. This study examined the impact of VSLA services on household welfare in Alebtong District.

Methodology.

This study adopted a cross-sectional survey with mixed research methodology, which involved both quantitative and qualitative approaches, to conduct an intensive investigation on the effects of village saving and loan associations on poverty reduction in the Awei sub-county, the study population was 181 household heads who were VSLA (clients) members and 200 other VSLA members from Awei sub-county. Simple Random Sampling using the lottery method will be employed to select respondents from the VSLA members.

Results.

56.72% of the participants were female, (32.09%) of the respondents were aged between 31-40 years. There was a strong positive relationship between Accumulated Savings and household welfare (Coefficient = 0.290, p = 0.001), the study found that access to credit is not significantly related to household welfare (Coefficient = 0.014, p = 0.820) and the study found out that VSLA membership benefits are significantly linked to higher household welfare (Coefficient = 0.284, p = 0.012).

Conclusion

The study concluded that there was a strong positive relationship between Accumulated Savings, VSLA membership benefits, and household welfare, meaning that higher savings correspond to greater welfare. Additionally, access to credit was not significantly related to household welfare, suggesting that it is not a predictor of household welfare in this context.

Recommendation

It is advisable to explore alternative pathways to improving household well-being, such as education and employment opportunities.

Organizations and communities should promote and expand VSLA programs to empower households and improve their overall economic well-being.

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