Impact of Rural Saving and Credit Cooperative on Food Security and Income of Individual Households: In the case of Yenetsanet Fana Saving and Credit Union of Gurage Zone,Southern Nations Nationalities and Peoples Region(SNNPR)

Abstract

RUSACCO has become one of the popular financial services that supports the resource poor urban and rural people’s efforts of escaping from miserable poverty and food insecurity problem. It has also been taken as one of the rural finance that provides financial services such as credit and savings to enable the rural households to improve their income and diversify their source of income that will help them to minimize the probability that they will easily experience the food insecurity problem. In this study an attempt has been made to see whether the users of Yenesanet Fana RUSACCO union have been enjoying this benefit or not. More specifically, an attempt has been made to see whether the RUSACCO member households are able to improve their food security situation after their involvement in the program. To this end, certain food security indicators have been used and the users were approached to provide information along these indicators by comparing the non-RUSACCO member and RUSACO member households. In connection to this they were also made to describe their source of food and cash income (agriculture and livestock produced, consumed and soled, employment, transfer; remittance and wild food consumed were assessed). To this end the sample of 71 RUSACCO member households and 60 non-RUSACCO member households has been randomly selected and the data collected from this sample have been analyzed mostly descriptively. Accordingly, it has been found that the majority of the service user’s have observed positive change on the food security indicators that have been used in this study after their participation in RUSACCO program. Moreover, the great majority of the users included in the study have reported that RUSACCO program has helped them in improving their disposable income, living standard threshold, overall asset, the yearly farm harvest, and on food intake in kilo calories, implying that the program is playing some positive role in their household level food security ensuring efforts. However, though they recognize this role of the financial services they receive from the institution most of the users have voiced certain complaints on institutions services like the size of loan, access to loan and loan repayment and schedule.