Achievements and Challenges of Community Based Saving and Credit Cooperative: The Case of Kebele 16 Saving & Credit Cooperative of Arada Sub-City in Addis Ababa

Abstract

Kebele 16 SACCO is a community based cooperative established to enhance the saving habit and practice of its members and to provide loan service to them mainly for expanding and starting income generating activities. When established initially, there was an intent to target women engaged in small businesses and had a plan to do so. The primary goal of this study is to investigate achievement of the objectives of Keble 16 SACCO, to explore its benefits to the SACCO members and to identify the strengths and challenges of the cooperative in sustaining its services. The study employed descriptive research design and data was collected using semistructured questionnaire, interview schedule and review of the different documents of the SACCO. The SACCO had 110 members and 82 of them were sampled using simple random sampling from the list of the members for the survey. Key informants for the interview were the SACCO Management Committee members, the bookkeeper and Cooperative Development Experts at Arada Sub-City and Woreda 5 Administrations. The study shows that close to 78 percent of the SACCO members are women. It also reveals that most of the SACCO members (92%) met the requirement of compulsory saving. This achievement is witnessed against the fact that some SACCO members (24%) were not made aware about the existence of compulsory saving by the SACCO. The study also indicates that 84 percent of the SACCO members had access to loan from the SACCO. It was also learnt that the last loan accessed by each SACCO member was Birr 4637 on the average while the minimum and the maximum loan amount were Birr 2000 & Birr 7000 respectively. From the SACCO members who benefited from the loan service, 79% percent of them used their last loan to expand their income generating activity and 7% to start new ones. Petty trading, weaving and pottery are the types of IGAs on which most of the SACCO members invested the money accessed though the loan. Thus, on the basis of these and related findings of the research it can be concluded that the SACCO attained its objectives. While adoption of the required SACCO structure had its own contributions for this achievement, the study found that Education and Supervisor & Control Committees of the SACCO which are vital components of its management were not functional however. The study also indicates that the SACCO had challenges which could deter sustaining its services to its members if not timely addressed. The most notable ones in this regard are non-functionality of two Management Sub- Committees (Supervisor & Control and Education Sub-committees), lack of commitment of most of the Management committee members, reduced attention to giving orientation to new members, repeated re-election of some management committee members and the resultant boredom, low level of awareness and commitment of SACCO members about their obligations and problem of securing office for the SACCO. Finally key recommendations of the study include strengthening of the management committee of the SACCO and taking measure to enhance the awareness of the SACCO members. The support of the Cooperative Development Core Process of the Sub-City and Woreda 5 administration is also considered crucial in addressing the outlined challenges of the SACCO.