CHAPTER FOUR
PRESENTATION, ANALYSIS AND INTERPRETATION OF RESULTS
This chapter mainly presents the findings from the study. The findings on the effect of village saving schemes on poverty eradication among people in Busimbi sub county, Mityana district. The findings of the researcher were acquired from 70 respondents. The researcher distributed questionnaires and all of them were returned. She also carried out personal interviews with the respondents.
4.1 Background variables
The respondents’ gender, age, marital status and education level were treated as background variables of the study.
4.1.1 Gender of the respondents
The table below gives the details regarding the gender of the respondents;
Table 4.1: Gender of the respondents
| Responses | Frequency | Percent |
| Male | 42 | 60.0 |
| Female | 28 | 40.0 |
| Total | 70 | 100.0 |
Source: Primary data
From the findings of the study, it was revealed that majority (60%) of the respondents were males while their counterparts represented 4o% of the total responses. It is evident from the table above that a significant percentage of both sexes were represented implying that the study was not biased. This could have been because of the fact that village saving schemes are seen as the surest way of development since they help member to save at subsidized rates than the normal banking system.
4.1.2 Age of the respondents
The study also was interested to establish the age of the respondents and the figure below presents the responses;
Figure 4.1: Age of the respondents
Source: primary data
From the findings of the study, it was revealed that the bigger percentages (55.7%) of the respondents were aged between 25 and 35 years while 28.6% of the respondents were aged above 35 years of age and only 15.7% were less than 25 years. The above trend in participation advanced by the respondents is a valid one, this is attributed to the fact that elderly are exposed to village saving schemes more that the youth and this could also be because of the fact that they are aware of the importance of the village saving scheme model as they given the opportunity to save regularly with their village saving scheme.
4.1.3 Marital status of the respondents
The study was also interested in finding out the marital status of the respondents; figure below presents the details;
Figure 4.2: Marital status of the respondents
Source: Primary data
From the findings of the study, it was revealed that majority (85.7%) of the respondents were married while 14.3% of the respondents were single. This type of participation is valid, implying that the study was in position to meet the real people who were well grounded with the information.
4.1.4 Education level of the respondents
The study also captured data on the education level of the respondents, and table 4.2 below gives the details of the findings;
Table 4.2: Education level of the respondents
| Responses | Frequency | Percent |
| Primary | 16 | 22.9 |
| Secondary | 37 | 52.9 |
| Diploma | 9 | 12.9 |
| Degree | 8 | 11.4 |
| Total | 70 | 100.0 |
Source: Primary data
It was found out that majority of the respondents (52.9%) had reached up to secondary level of education while 22.9% of the respondents went up to primary level. 12.9% of the respondents were degree holders and 11.4% of the respondents were diploma holders.
From the interviews with the respondents, the study found out that all the employees from some saving schemes had bachelors and diploma holders, implying that organizations considers graduate employees to be very creative, knowledgeable and possessing expertise in various areas of banking and financial handling of members’ savings.
4.2 Services offered by village saving scheme to its members in the society
The first objective of the study was to assess the Services offered by village saving schemes to its members in the society and the responses were presented according to the study questionnaires.
4.2.1 Date of joining the village saving scheme by the respondents
The responses to how long the members had been saving with village saving scheme were summarized in table below;
Table 4.3: Date of joining the village saving scheme
| Responses | Frequency | Percent |
| Less than 2 years | 14 | 20.0 |
| Between 2 and 5 years | 40 | 57.1 |
| Above 5 years | 16 | 22.9 |
| Total | 70 | 100.0 |
Source: primary data
It was observed that most of the members (57.1%) joined village saving scheme for a period between two and five years while 22.9% of the respondents had been in the village saving scheme for over five years and lastly 20% of the respondents had joined village saving schemes for less than two years.
This implies that the greater percentage joined village saving schemes for a long period of time implying that the people of Busimbi comply with the government’s programmes such as prosperity for all scheme; which emphasizes financial services access through community based village saving schemes, and thus improving their savings culture and consequently development of the society.
4.2.2 Services Offered by the VILLAGE SAVING SCHEME
The study captured data on the services offered by the village saving scheme, and table below presents the findings regarding the services offered by the village saving scheme;
Table 4.4: Services offered by village saving scheme
| Responses | Frequency | Percent |
| Loans | 15 | 21.4 |
| Savings | 30 | 42.9 |
| Financial Education | 25 | 35.7 |
| Total | 70 | 100.0 |
Source: primary data
From the findings of the study, it was revealed that majority (42.9%) mentioned savings custody as the major product offered by people’s cooperative village saving scheme.
35.7% of the respondents mentioned financial education and 21.4 mentioned loans. This implies that every potential member must purchase a minimum share as determined by the village saving scheme making each member an owner of the cooperative.
From the interview with the manager of one of the village saving schemes, it was revealed that once the share has been fully paid up, all other contributions will go towards savings and the any members who wish to get a loan, the village saving scheme considers his share capital to determine the amount that he/she qualifies for in loans.
This finding is valid, implying that getting a loan from the village saving scheme is fast. What is required is that members are encouraged to save toward loans. Loans are ratio based on member’s savings and shares.
4.2.3 Requirements for getting a loan
The responses to requirements for getting a loan were summarised and the findings are as presented in the figure below;
Figure 4.3: Requirements for getting a loan
Source: primary data
From the findings of the study, it was found out that majority (41.4%) of the respondents suggested that getting a loan from the village saving scheme requires one to be a member of the group which leads to the second requirement as shares (35.7%).
In some instances 12.9% of the respondents suggested that one has present a land Purchase/ownership agreement and lastly 10% of the respondents mentioned a minimum of 2 guarantors as a requirement for getting a loan. This implies that individuals who have established their credit worthiness through regular savings and are able to show ability to repay a loan can earn the privilege of borrowing these savings in the form of a loan without any collateral.
4.2.4 Whether living standard has improved after joining the village saving scheme
The following table has been summarised from the responses received from the field regarding whether living standard has improved after joining the village saving scheme
Table 4.5: Whether living standard has improved after joining the VILLAGE SAVING SCHEME
| Indicator | Yes | No | Total | |
| Household income levels | Freq | 60 | 10 | 70 |
| Percent | 85.7 | 14.3 | 100.0 | |
| Household savings culture | Freq | 63 | 7 | 70 |
| Percent | 90.0 | 10.0 | 100.0 | |
| Household education levels | Freq | 50 | 20 | 70 |
| Percent | 71.4 | 28.6 | 100.0 | |
| Household health services | Freq | 49 | 21 | 70 |
| Percent | 70.0 | 30.0 | 100.0 |
Source: Primary data
From the findings of the study, it was revealed that majority of the respondents (85.7%) of the respondents strongly agreed that their household income levels had improved after joining the village saving scheme and only 14.3% of the respondents did not agree. This implies that credit facilities are essential to the Village saving scheme members.
It was also revealed that majority (90%) of the respondents strongly subscribed to the view that village saving scheme has helped to improve their household savings culture ever since they joined the village saving scheme and only a smaller percentage (10%) suggested that their household savings culture had not changed. This implies that financial services in the form of savings products, loan products and financial education help members to aim at improving savings which lead to capital accumulation leading high incomes and improve quality of members’ lives.
From the findings of the study further, it was revealed that majority of the respondents (71.4%) mentioned that their household education levels had improved after joining the village saving scheme and 28.6% of the respondents’ household education levels had not improved. This implies that education level of the borrower was significant in credit acquisition given that from the interviews conducted, it was revealed that members save for various purposes including getting school fees of their children.
The findings of the study further revealed that majority (70%) mentioned that their household health services had improved after joining the village saving scheme, while 30% did not subscribe to the view. the finding suggests that village saving schemes provide institutional development in area where the formal bank cannot reach.
4.3 Challenges affecting VILLAGE SAVING SCHEMES in the society
The third objective of the study was to establish the Challenges affecting village saving schemes in the society. The study set the following study attributes to achieve the purpose of this study objective.
Table 4.6: Challenges affecting village saving schemes in the society
| Responses | Frequency | Percent |
| Poor Savings culture | 27 | 38.6 |
| Multiple borrowing which leads to high default rates | 17 | 24.3 |
| Taxation of members interests which discourages members | 14 | 20.0 |
| lack of proper regulations for village saving schemes which causes challenges in loan recovery process | 12 | 17.1 |
| Total | 70 | 100.0 |
Source: Primary data
Respondents were asked whether in their own view, whether there were challenges affecting their village saving scheme. To this, there was unanimous agreement among respondents of existence of the challenges affecting village saving schemes in the society. Majority (38.6%) of the respondents suggested poor savings culture among the locals as the major challenge while 24.3% of the respondents suggested multiple borrowing which leads to high default rates. 20% of the respondents mentioned Taxation of members interests which discourages members and 17.1% of the respondents mentioned lack of proper regulations for village saving schemes which causes challenges in loan recovery process. This implies that access to the required loan money for most clients was not a problem, but rather proper usage of the loan funds, poor savings culture and high default rates high interest rates.
4.4 Strategies to overcome the challenges affecting village saving schemes in the society
The last objective of the study sought to establish the strategies to overcome the challenges affecting village saving schemes in the society, the responses were summarized and they are as presented in the table below;
Table 4.7: Strategies to overcome the challenges affecting village saving schemes
| Responses | Frequency | Percent |
| Institution of village saving scheme regulatory body and laws other than the cooperative statute | 11 | 15.7 |
| Embracing of management information systems and software for accounting and loans management | 25 | 35.7 |
| Capacity building training for village saving scheme’s members, staff and board to enable them deliver financial service effectively | 34 | 48.6 |
| Total | 70 | 100.0 |
Source: Primary data
From the findings of the study, it was revealed that majority (48.6%) of the respondents suggested that the major strategy to overcome the challenges affecting Village saving schemes is to enforce Capacity building training for village saving scheme’s members, staff and board to enable them deliver financial service effectively while 35.7% of the respondents mentioned embracing of management information systems and software for accounting and loans management and 15.7% of the respondents mentioned institution of village saving scheme regulatory body and laws other than the cooperative statute.
CHAPTER FIVE
DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS
5.1 Introduction
This chapter presents the discussions of the study, conclusions and recommendations which are in line with the objectives of the study.
5.2 Discussions
5.2.1 Services Offered by village saving schemes
Findings indicated that savings custody was the major product offered by village saving schemes. Other products included loans, shares, quick/emergence loans as well as financial education. This therefore justifies the objective of the study. These findings are in agreement with the work of various authors and publications, For instance,
Bailey, (2001) earlier reported that the most common form of products offered by village saving schemes is savings. He earlier noted that saving constitutes the key elements on which the development of the community depended.
Furthermore, in the documents produced by Kirkpatrick (2002) it was reported that the other most common product offered throughout the village saving scheme fraternity is the Credit and Loan services. In line with this, Mutekanga (1998) also reported that village saving schemes provide financial services to their members through existing product or marketing societies, thus this confirms Pelrine and Katabalya (2007) findings that village saving schemes indeed have a great impact on the level of the savings culture.
Davis & Worthington, (2005) also earlier noted that village saving schemes offers the widest variety of specialized savings products, including a savings program for women. He also suggested customers have a choice between immediately accessible, liquid products, or semi-liquid accounts or time deposits with accordingly higher interest rates.
5.2.2 Challenges affecting village saving schemes in the society
The findings on the challenges affecting village saving schemes in the society indicated that the major challenge was poor savings culture among the locals. Other stressing challenges were multiple borrowing which leads to high default rates, Taxation of members’ interests which discourages members and lack of proper regulations for village saving schemes which causes challenges in loan recovery process.
The above findings confirms the works of earlier researchers for instance, Balassa (1989) earlier reported that financial institutions experience a wide range of problems partly owing to the fact that they target low income earners and have to establish a balance between serving them adequately and also meeting their operation costs.
Fred (2007) also reported that most village saving schemes either have no loan policy and procedures or what exists is not very clear and comprehensive. There are cases where loan-aging analysis is hardly practiced, there are no provision for loan write offs and losses.
5.2.3 Strategies to overcome the challenges affecting village saving schemes
From the analyses and presentations in chapter four, it was established that there were varied range of strategies mentioned by the respondents. The findings established that that the major strategy to overcome the challenges affecting Village saving schemes is to enforce Capacity building training for village saving scheme’s members, staff and board to enable them deliver financial service effectively. Other strategies included; embracing of management information systems and software for accounting and loans management and institution of village saving scheme regulatory body and laws other than the cooperative statute. These strategies are in agreement with Wahid (2008) who earlier reported that one of the objectives of village saving schemes is to promote a saving culture amongst their members since savings has a close relationship with wealth. Higher rates of saving, lead to faster accumulation of wealth and, the wealthier a nation was, the higher its standard of living (S.O.L) in the future.
5.3 Conclusion
On the Services Offered by the village saving schemes, the research findings concluded that the major products offered by village saving schemes were; savings custody, loans and financial education. It can be concluded that village saving scheme loans have played a significant strategic role in providing the bulk of capital used by members to meet their needs such as education, business start-up and other ventures that require quick funding.
The research findings also concluded that the major challenge was poor savings culture among the locals. Other stressing challenges were multiple borrowing which leads to high default rates, Taxation of members’ interests which discourages members and lack of proper regulations for village saving schemes which causes challenges in loan recovery process.
On the strategies to overcome the challenges affecting village saving schemes, the study findings concluded that the major strategy to overcome the challenges affecting Village saving schemes is to enforce Capacity building training for village saving scheme’s members, staff and board to enable them deliver financial service effectively.
5.4 Recommendations
The following recommendations were made as regard the findings of the study;
The study recommends that the village saving scheme management should encourage its members to deposit daily part of profits/incomes that they earn in their personal savings accounts with the village saving scheme as this would help them to improve their savings culture.
The study further recommends the government and other stakeholders should organize training of the people on proper ways of saving and usage of the loan obtained from the village saving scheme. This would help in mounding their expenditure habits especially discouraging them from spending their incomes extravagantly and thus improving the savings culture.
Savings and credit cooperatives should employ highly trained staff who can do the monitoring evaluation of the utilization of the loan. And also to train, educate and sensitize the members on short-term investment and other business portfolios.
The study also recommends that village saving scheme management should encourage its members to start income generating activities. This will help them to accumulate enough incomes for consumption and savings since the business activity set up will act as a sources of savings.
5.5 Area for further research
Further research should be taken on the impact of microcredit on agricultural production and productivity in Busimbi Sub County.
