THE CONTRIBUTION OF PARTICIPATION IN SAVING AND LENDING GROUPS (SLG) TO THE HOUSEHOLD WELFARE THE CASE OF YEKOKEB BEREHAN PROGRAM FOR HIGHLY VULNERABLE CHILDREN (HVC), EAST SHEWA ZONE, ADAMA CITY, ETHIOPIA

Abstract

This study analyses the impact of Saving and Lending Groups (SLG) activities in general terms, and specifically it focuses on household saving and credit members of the Community Saving Self-Help Groups (CSSG) in Adama City. CSSGs are a form of community-based savings institutions with a number of socio-economic functions. The functions include mobilization of communities to save and/or invest their resources into income generating initiatives, extend micro credit services to members to launch or expand microbusiness upon members’ experience and capacity to run a business, and of course based on the established rules, trust and solidarities among themselves. The study was conducted in Oromia regional state of Ethiopia, East Shewa zone of Adama city. The purpose of the research was to assess the contribution of SLG interventions in supporting household welfare, particularly assessing the impact of SLG interventions on income, asset, social capital and the effect of income on ensuring household welfare. Primary data was collected using quantitative and qualitative methods and review of literature was undertaken on the economic and social performance impacts of SLG intervention. In view of this, using the descriptive and econometric analysis such as Propensity to score matching (PSM), the SLG intervention analysis and interpretation were done to see the impact on basic household economic issues such as change in income, change in asset and living standards, improvement in health and education, quality of housing and self-employment creation efforts at household level. The PSM estimation findings provided statistically significant effect for the SLG intervention which yielded at least ETB 1368.074 income difference on average between beneficiaries and non-beneficiaries, given all other things kept constant. The household’s total income increase, social capital increase and developing self-confidence and overall income increase trend were considered the important factors that help households to create assets in the way it contributes to the household welfare and meeting basic needs in the study area, and by implication across SLG intervention areas The findings further revealed that occupation was the only indicator that has shown significant difference between beneficiaries and non-beneficiaries category, otherwise there were no differences in most other demographic characteristics such as sex, age, family size, marital status and education level between the beneficiary and non-beneficiary household groups With regard to the financial access, the findings indicated that community based microfinance services such as access to loan through saving and credit groups have direct impacts on variables such as income diversification, asset accumulation, and meeting other life coping strategies. It was learned that this finding is consistent with the objectives and hypothesis of the study.