| Abstract: | Poverty is a major social and economic problem in Ethiopia. The country is often reported as one of the poorest country in the world. The country has undertaken various measures to reduce the impact of food insecurity in the rural community. One of the strategies that the country has undertaken to reduce food insecurity and enhance rural development is the establishment and strengthening of rural cooperatives.
SACCO and MFI were established and expanded in rural area to reduce food insecurity through improved production and income of the rural people. The purpose of this study was to study the role of Saving and Credit Cooperative on food security and rural development in ONRS, Arsi zone, Sire district. The research was based on three main objectives; 1. To determine the contribution of cooperatives on rural food security and rural development; 2. To identify factors affecting cooperative contribution for improving food security and rural development; 3. To propose development solution for improving the contribution of cooperatives on food security and rural development. The researcher used descriptive, cross sectional and associational research designs. Descriptive design was used in describing the impact of accessing credit and its role on food security. Associational design was used in establishing the relationship between credit accessibility and production and income improvement.
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Findings of the study revealed that organizing SACCO in rural area has played a positive role on the rural development at Sire district. It has played a positive role on improvement of production and income of poor households. However, the study found some gaps in SACCO’s interventions, for example, in skill training. Trainings were not given to most SACCO members to utilize the finance in the way that improves their income. In addition, some marginalized groups like widows, elderly and adolescents without land were mostly less favored.
Finally the study recommended that in order to improve food security of the rural poor people of Sire district the government should conduct skill development training and organize and strengthen SACCO that should finance more loan to people who are lacking security and hedge against credit risk through proper credit rating and allowing members to form core groups which would act as security. Finally, SACCO should consider the inclusion of the needy, like thewidows and teenagers |
