SOCIO-ECONOMIC IMPACT OF SACCOs ON WOMEN WELFARE OF NSANGI SUBCOUNTY, A CASE STUDY OF NSANGI SAVING AND CREDIT CO-OPERATIVE SOCIETY WAKISO DISTRICT

ABSTRACT

Savings mobilization is a key component in any development endeavor as it is believed to be way of increasing income and boosting productivity in attempt to eradicate poverty. The main purpose of the study was to find out the Socio-economic impact of SACCOS on Women Welfare in Nsangi Subcounty, Wakiso district. The study utilized a sample of 1 selected SACCO out of 2,500 and 180 SACCO members out of 150,000 in Wakiso District. These were selected through random sampling technique. A semi structure questionnaire was used to collect data from 20 respondents and Focus group of discussion. Data was analyzed using frequencies, percentages and measures of central tendency like means. The analyzed data was presented using tables, charts and figures. A response rate of 95% (19) respondents was achieved. The study revealed that training requirement had an average positive influence on saving mobilization, while investment opportunities and intervening Variables had a strong positive influence on saving mobilization. The most significant factors were investment opportunities, and intervening variables at 99% confidence level. It was therefore concluded that cooperative strategies partially affected members’ savings mobilization.

CHAPTER ONE

INTRODUCTION

1.0 Introduction

This chapter contains background of the study, statement of the problem, purpose of the study, research objectives and questions, scope of the study, significance of the study and summary of the research.

1.1 Background of the Study

Throughout the time, all around the world, households have saved as insurance against emergencies, for social and religious obligations for investments and for future consumption (Rutherford, 1999). Saving ought to have started before the birth of Jesus Christ in the Roman Empire. It adventure is very much linked with the origin of money where merchants used to keep (save) their precious metals with the gold smiths who would give them back their gold when they are back after their business,(Cox, 1996).

A study revealed by Bailey’s (2001) states that saving is the key benefit that a member gets from the organization because a member is enabled to get a loan. Savings and Credit Cooperatives (SACCOs) being established by micro-business in the rural areas and urban areas have raised the standard of living for the people, provision of financial services to all vulnerable groups including women, the youth and the disabled. This has helped to elevate their status in society through economic and social empowerment, capacity building for SACCO members and staff through awareness and training on various skills like leadership and management skills, record keeping, importance of savings, management of micro-projects and basic financial management, inculcation of culture of savings in the lives of people and discouraging non-productive expenditures.(Cox,1996) It is source of direct employment for the members and staff of the SACCO and indirectly impacting the lives of many households who depend on the members and staff of the SACCO. Many rural micro projects such as restaurants, taxis, salons, handicrafts, shops and kiosks have been started from the loans taken by members of SACCOs.(Evans,2002) SACCOs have enabled the savers to acquire the capacity to build low cost, yet high quality, housing units, and to buy vital household item, and put their children through affordable school system and SACCOS have enabled members to put some of their loans in agricultural development thereby increasing the productivity in the agricultural sector and enhancing food security (Evans, 2002).

SACCOs role is to promote economic interest of their members and in particular to promote thrift among its members by affording them an opportunity for accumulating savings and paying reasonable interest without risk on such savings(Kabuga and Batarinyebwa)SACCOs Create source of funds from which it can afford relief to its members in need by making loans to them for productive and provident purposes are fair and reasonable rates of interest and with easy terms or repayment, continuously educate members on how savings can be made on regular basis and the wise use their savings; and provide service to its members such as financial counseling so that the members can solve most of their financial problems, and the risk of management service to ensure the safety of members’ savings and loans(Ssemogerere,2005). To fight poverty through improving the members’ economic and social conditions by enabling the access financial services, to fight exploitation of powerless individuals by the powerful individuals or institutions, by polling their own resources to meet their needs. Formation of a SACCO has the following benefits to members: members are encouraged to save since SACCOs are readily accessible, interest rates on saving and lending is better than elsewhere a fact that sound idealistic, members are taught how to handle their finances in a responsible manner this could be true only when they effectively and economically patronize their SACCOs. Loans are insured, so if a member dies, the outstanding balance is settled. However, it is not the practice across board. Besides; other MFIs also do insure loans for their clients. Savings are mobilized. It also encourages regular social interaction between members (Kabuga and Batarinyebwa, 1995).

Savings and Credit Cooperatives (SACCOs) in Africa are intended to offer an alternative to improving the desirable situation in low income countries. SACCOs are community membership based financial institutions that are formed and owned by their members in promotion of their members economic interests.(kabeer,2001)

The performance of the SACCOs industry in Uganda has so far revealed mixed economic trends although on the whole it has indicated promising results. Studies conducted on the industry show that there has been an increase in number of SACCOs outlets.Despite the above facts and statistics, it is clear that the SACCO industry in Uganda is still in its infancy. Banks still dominate the financial sector as shown by the number of total clients and the number of savings accounts. Unfortunately banks are still concentrated in urban centers. SACCOs associations still have a long way in building their client base, their savings and loan portfolios.  SACCOs have by far the biggest potential to gain ground and capture the sector.  These recognized the need for better access to small enterprises for small holders as key catalyst for enhancing production, competitiveness and incomes (Mugwanya et al,2004).

According to Manyara,(2003),Recognizing the importance of savings mobilization for the development of a nation, the study will find out why SACCO members do not have savings facilities and no confidence with their SACCOs for the socio economic effects on their savings mobilization; SACCOs have no effective savings mobilization strategies and are unable to outreach members; SACCOs have no regulatory mechanism to develop enforcement of prudential standards and enhance safety and soundness of members’ funds and are unable to meet the growing demand for loans and yet they are potential savers;(Champo,2008) there are no financial strategies put in place for the members’ savings mobilization and no member training on savings mobilization; there are no strategies for evaluating investment opportunities for members’ savings mobilization; the study also would like to verify whether the products that SACCOs offer will be able to boost productivity for their own development and the nation at large; how the marginal savings will be mobilized and made more beneficial for the urban sector in general and for the development of the economy in particular; and how immediate will fringe benefits from savings be introduced and be made appreciable to the potential savers, and how cooperative strategies and conditions through which Women savings will be tapped by the formal sector.

1.2. Statement of the Problem

Despite the fact that there is wide spread of SACCOs in and around Wakisodistrict whose main aim is to stimulate Women Welfare, sustainable economic growth of micro entrepreneurs through provision of financial loans and non financial services (MOF report, July 2008).Many Women complain about no effective savings mobilization strategies and are unable to outreach members; SACCOs have no regulatory mechanism to develop enforcement of prudential standards and enhance safety and soundness of members’ funds and are unable to meet the growing demand for loans and yet they are potential savers; there are no financial strategies put in place for the members’ savings mobilization and no member training on savings mobilization; there are no strategies for evaluating investment opportunities for members’ savings mobilization,(Morduch, 2005). It therefore calls for research to find the Social-Economic impact of SACCOs on Women Welfare in NsangiSubcounty, Wakiso District.

1.3Purpose of the study

The purpose of the study was to find out the Socio-economic impact of SACCOS on Women Welfare in Nsangi Subcounty, Wakiso district.

1.4 Research objectives

1. To examine the different types of services that SACCOs offer to Women in Nsangi Subcounty.
2. To establish the effects of SACCOs on Socio economic Welfare levels among Women in Nsangi Subcounty.

• To find out the challenges, hindrances and barriers faced by Women in accessing SACCO services

1. To propose best way forward for full utilization of SACCOs on Women Welfare.

1.5 Research questions

1. What are the different types of services that SACCOs offer to Women in Nsangi
2. What are the Socio economic Welfare levels among Women in Nsangi Sub county?

• What are the challenges hindrances and boundaries faced by Women in accessing SACCO services?

1. Are there best ways forward for full utilization of SACCOs on Women welfare?

1.6 Scope of the study

1.6.1 Geographical scope

The study was carried out in Nsangi Subcounty Wakiso district, which is about 12 kilometers from the heart of Kampala town along Masaka road.

1.6.2 Content scope

The researcher only looked on the impact of SACCOs on Social economic Welfare of Women in Nsangi Subcounty.

1.6.3 Time Scope

The study was covered a period from May-july because this period of the year provided current data that was more reliable.

1.7   Significance of the study

1. Government: With the research completed, the findings will enable the government set up policies governing the microfinance institutions towards the microcredit lending systems. And policies that will greatly encourage fair distribution of resources in the savings and credit cooperatives if better results are to obtained.

   ii.        Women: This research when completed, women will be able to find out about their continued empowerment by SACCOs, challenges associated and their efforts in overcoming the challenges.

• Management:The study findings will be beneficial to Management to acknowledge different products of SACCOs and suggest ways that require improvement.

1. Donors:This research mainly focus on whether these SACCOsprograms really contribute to social and economic Welfare in rural women to gain a better livelihood and as such give an insight to the donors on the needy areas and people who need urgent support in the microcredit services.
2. Researcher: The findings of the research will not only broaden the knowledge and understanding of the researcher on Social-Economic impact of SACCOs on Women Welfare but also will enable the researcher acquire a bachelor’s degree.The findings from the research will also add on the existing literature on the topic and be a basis for further research in future.

1.8 Definition of Key Terms

SACCOs : Savings and credit cooperatives (SACCOs) are user – owned financial intermediaries with members who are typically share a common bond base on geographic area, employer, community, or other affiliation and have equal voting rights (CGAP 2005).

Social Economic Welfare :The well-being of the entire society. Social welfare is not the same as standard of living but is more concerned with the quality of life that includes factors such as the quality of the environment (air, soil, water), level of crime, extent of drug abuse, availability of essential social services, as well as religious and spiritual aspects of life.

1.9 Summary of the Report.

This research report will be in five chapters.

 Chapter one: will contain Background to the study, Problem statement, Purpose of the study, study objectives, Research questions, scope of the study, and significance of the study, definition of Key terms and Summary of the report.

 Chapter two: will cover literature Review, Introduction to literature review, based on the study variable.

Chapter Three will cover the study methodology, research design population study, sample size, sampling procedures, data collection methods and instruments, data processing, analysis and presentation.

 Chapter Four will cover data presentation, interpretation, Analysis and discussion of the findings,

 Chapter Five will cover summary, conclusion and recommendation.

CHAPTER TWO

LITERATURE REVIEW

 2.0 Introduction

In this chapter the research will look at critical analysis of work done by other researchers on the SACCOs. We shall look at the definitions of SACCOs and socio-economic welfare , examine the existing knowledge about SACCOsin relation to the set objectives of the study which are to examine the different types of services that SACCOs offer to Women in Nsangi Subcounty,to establish the Social economic Welfare levels among Women in Nsangi Subcounty,to find out the challenges, hindrances and boundaries faced by Women in accessing SACCO services andto propose best way forward for full utilization of SACCOs on Women Welfare.

2.1 Overview of SACCOs

A SACCO is an acronym for Savings and Credit Co-operative Societies. This is an autonomous association of persons united voluntarily to meet their common economic and social needs through a jointly owned democratically controlled enterprise or business,(Muwanga,2000).A SACCO is a member owned financial cooperative whose primary objective is to mobilize savings and afford member access to loans on competitive terms as a way of enhancing their socio-economic well being. It is an organization owned by people living in one area such as farmers or people working together,(Navajas,2000).A SACCO has common bond namely; community bond and occupational/association bond. Community bond exists when members are resident in a particular locality or neighborhood such as farmers, businessmen and fishermen. It caters for all people within the community. Occupational/association bond is for people employed by the same employer or belonging to the same profession. The common bond ensures that there exists among members as sense of identity, mutual concern, cooperation, loyalty and trust. The common bond protects the SACCO because members know each other. This facilitates efficiency and effectiveness in credit management for the growth of business or farm enterprise and better access to social services like medical and education just to mention a few. Members are the heart of a SACCO and are reasons for the SACCO existence (Ahimbisibwe, 2007).He goes ahead to say SACCOs are forms of cooperative societies whose core business is to encourage thrift and easy access to credit to their members. Savings and Credit Co-operatives play an important role in the socioeconomic development of the people, they provide avenues for members to save regularly and then borrow for productive and welfare purposes. Like any other cooperative organizations are guided by the practices, philosophy, fundamental principles and values of the cooperative movement world over.

SACCOS can be formed by any group of people who either has common bond (like in the case of one employer), or people with similar objectives. Examples of such people are Government employees, employees of government parastatals, teachers, nurses, doctors, traders, mall workers, municipal workers, tax workers, employees of private commercial companies, parliamentarians, hawkers and domestic workers. A SACCO is one of a cooperative society whose business is to provide financial services to its members. SACCOs are legal institutions registered under the cooperative laws (1991 Cooperatives Act and 1992 cooperative Regulations). SACCOs are owned by their members through payment of share capital and membership fees to the institution. It is also a democratic, unique member driven, self-help, not for profit financial cooperative. It is owned and governed by members who have the same common bond. A SACCO membership is open to all that belong to a group, regardless of race, religion, colour, creed, and gender or job status. These members agree to save their money together in the SACCO and to make loans to one another at reasonable rates of interest. (Kabuga and Batarinyebwa, 1995).

Savings and credit cooperatives (SACCOs) are user –    owned    financial intermediaries with members who are typically share a common bond base on geographic area, employer, community, or other affiliation and have equal voting rights (CGAP 2005). SACCOs are increasingly gaining worldwide fame as important actors in the microfinance industry (Armendaris and Morduch 2005). The World Council of Credit Unions (WOCCU 2007) notes that 22 sub Saharan African countries have a total of over 11,849 credit unions with assets of over USD 3 trillion.

In Uganda the position of SACCOs has been heightened by the launch of the government “BonnaBagaggawale” (Prosperity for All) programme intended among other interventions to address inadequate access to financial services. This programme is to use a SACCO- per sub- county strategy to channel both SME and commercial loans at below market rates to borrowers. Micro Capital Monitor (2009) identifies that the government of Uganda has set aside the equivalent of USD 133.7 million for subsidized loans to individuals and small business through the government- owned. Microfinance Support Centre (MSC) to Saving and Credit Cooperative Societies (SACCOs).

2.1.1 Concept of Savings Mobilization

According to(Kabuga andBatarinyebwa,1995),SACCOs role is to promote economic interest of their members and in particular to promote thrift among its members by affording them an opportunity for accumulating savings and paying reasonable interest without risk on such savings. They both add that SACCOs create source of funds from which it can afford relief to its members in need by making loans to them for productive and provident purposes are fair and reasonable rates of interest and with easy terms or repayment, continuously educate members on how savings can be made on regular basis and the wise use their savings; and provide service to its members such as financial counseling so that the members can solve most of their financial problems, and the risk of management service to ensure the safety of members’ savings and loans. To fight poverty through improving the members’ economic and social conditions by enabling the access financial services, to fight exploitation of powerless individuals by the powerful individuals or institutions, by polling their own resources to meet their needs. Further they say formation of a SACCO has the following benefits to members: members are encouraged to save since SACCOs are readily accessible, interest rates on saving and lending is better than elsewhere a fact that sound idealistic, members are taught how to handle their finances in a responsible manner this could be true only when they effectively and economically patronize their SACCOs. Loans are insured, so if a member dies, the outstanding balance is settled. However, it is not the practice across board. Besides; other MFIs also do insure loans for their clients. Savings are mobilized. It also encourages regular social interaction between members.

2.1.2 Evolution of SACCOs in Uganda

The SACCOs industry has existed in Uganda for some time now. It started gaining formal recognition in the 1980s,Wright and Rippey,2005). This was in part as a result of the emergence of foreign NGOs, which, as part of their humanitarian work introduced revolving credit schemes to help the communities improve their livelihoods. Later the government and indigenous NGOs embraced the idea, which subsequently led to the emergence of government/donor-funded micro-credit programmes, as well as the privately owned and operated SACCOs Unions,(Wright and Rippey,2005).

2.1.3 Previous SACCOs Activities in Uganda

Over the last two decades, Government of Uganda has initiated, implemented and supported various micro credit schemes aimed at fighting poverty in the country. The main focus of these programmes has been the provision of revolving funds for micro credit to households at the grass root level. Notable examples include the Poverty Alleviation Project (PAP), the Entandikwa Credit Scheme (ECS), the Rural Farmers Scheme, the South-West Small Holder Rehabilitation Project, the Cotton Sub-Sector Development Programme, the Masindi- Kibale Integrated Project, the District Development Service Project, the EU/GoU Micro Projects Programme, and Youth Entrepreneurs Scheme. ( IsaacShinyekwa 2005:23)

2.1.4 The Organization of the SACCO sector

The structure of SACCO sector is composed of the informal non registered and formal registered.  Informal finance refers to financial sector with key players being relatives/friends, savings and credit cooperatives/associations, money lenders, community-based oganisations, Non governmentorganisations (NGOs) according to [Wamasembe, 2001:14].

According to Katimbo-Mugwanya (1999:20) the registered informal sector operators include friends and relatives, moneylenders, rotational savings and credit associations (ROSCAs), Savings and credit unions(SACCOs) the post office savings bank, non-governmental organisations (NGOs) and other savings and credit association

2.1.5 The Growth and development of the SACCO Industry

According to MFPED 2003 June report, A country wide survey of the microfinance industry in Uganda conducted for the first time in 2002 , established that the industry was composed of about 1,340 SACCOs outlets that had about 329,000 borrowers with a loan portfolio of Shs 86.5 billion and 800,000 savers with a savings volume of Shs 129.1 billion. Another study was conducted in 2006 by the Ministry of Finance, Planning and Economic Development (MFPED), in collaboration with the Department for International Development (DFID)’s and Financial Sector Deepening Unit (FSDU), with an objective of providing a comprehensive picture of the financial sector, with particular emphasis on Tier 4 financial institutions. The survey established a total of 1,221 financial outlets were serving the financial market in Uganda. The same study established a total of 1,810,813 savings accounts in these financial outlets of which 488,442 or 27% were in the Tier 4segment. In terms of the distribution of the financial out lets  by district 27% the study revealed that 85% of the districts have a SACCO out let,  61.3% of the districts have Non –Deposit Taking MFI outlet and 68.8% of the districts have  Bank of Uganda regulated financial institution outlets and  6.1% of the districts have SIDAs. In terms of SACCO infrastructure, the study revealed that 16% of the districts have 6-10 SACCO outlets and 13.6% of the districts have only one SACCO outlet each. 20.9% of the districts have between 11-15 SACCO outlets and 14.8% of the districts have more than 15 SACCO outlets. (MFPED June 2003 Report: 25-2

2.1.6 Services offered to Women by SACCOs

SACCO’s play an important role in lower income groups through increasing their assets via establishing a credit relationship, establishing an enterprise, accessing working capital, increasing income through business expansion, meeting housing credit needs and increasing wealth through savings according to (Branch & Cora 1999).

However, targeting the use of credit is not justified in terms of sustainability, administering and monitoring loan use is time consuming and difficult. In most cases the loan use and eligibility criteria don’t meet the credit needs of poor women and men who may need to utilize their loans for a variety of purpose according to (Tranovich 20085).

Among many advantages, there are four primary strengths of SACCO’s institutions i.e. savings mobilization, services for lifetime asset growth, mixed outreach, and full services array of loan products. What distinguishes cooperatives from other non-bank financial entities involved in SACCO’s is the ability of mass number mobilization of small, voluntary, savings account. These deposits can then be invested in rural production, housing, small scale enterprises and small business loans according to (Branch & Cora, 1999).

In Nsangi Subcounty, Nsangi Savings and Cooperative Society managed to reach women who are having businesses and almost majority of those who were interviewed were of low income women who self sustained themselves to get a livelihood.

Branch & Cora (1999) say that, SACCO today emphasizes scale and depth of outreach of financial services to large numbers of the working poor through financially sustainable organizations. They offer a saving-first, self-sustainable approach to SACCO’s that has already successfully met the needs of millions of low-income members around the world.

Membership and lending of SACCO’s institutions are generally broadly diversified. Services to the poor are blended with service to a broader spectrum of the local population. Through serving the poor, these unions achieve sustainability by spreading their costs across loans of larger and medium sizes as well. In this manner these credit facilities can reach a large number of the poor on a sustainable basis. Through this they manage to reach significant scale and thus attain financial sufficiency. SACCO’s Unions are mixed outreach of financial institutions. It is scale, not exclusive focus that determines whether significant outreach to the poor will occur (Rhyne, Christen and Vogel, 1994)

Savings and credit cooperative unions encourage savings mobilization especially for the urban poor women. It is known that savings are key to investment, without them, investments are very hard to be realized. Boomgard (1994) had this to say;The demand for liquidity is far more important to most rural citizens than the demand forcredit. Savings mobilization is just as important as credit in meeting the financial needs of the rural population.

The above is confirmed by Magil (1994) that Savings and Credit Cooperative institutions play a great role in the provision of loan products. Members financing needs determine their credit union loan products. The borrowers usually access these loans for such purposes like housing construction, housing improvement, home purchase, small manufacturing, transportation business, debt financing, emergency needs, education, agriculture, cattle and chicken raising, fish-harvesting, personal expenses, and electric appliance purchases.

Credit cooperative loan portfolios are widely diversified. Since cooperatives lend for a wide variety of purposes, the portfolio risk of specializing in a single type of activity is reduced.

Women obtain credit for several reasons, which may include lack of school fees for their children, starting a livelihood, which show the need for credit. These are the problems common in NsangiSubcounty where poverty ranks the highest among community level problems (55%) according to Michan (2003).

Schmidt and Zeitinger, (1998), argue that, with respect to the speed with which a loan can be obtained, flexibility regarding the terms of the loan, and most importantly with regard to transaction costs, the non conventional individual-based technology is definitely superior to all kinds of group lending technologies for small and medium entrepreneurs.

Some savings a credit cooperative unions offer solidarity group loans designed for lower-income or “down scale” small scale entrepreneurs. For many low income members most especially women and members who live in urban slum areas far from the cooperative union access to a local solidarity group provides them with a lower-cost method to access loan credit services. This is common here in Uganda, Bolivia, Philippines and Bangladesh. All the above services make it easier for the urban poor women to access the services. Micro credit programs extend small loans, often 75 or 100 dollars, to very poor people especially women, for starting or augmenting business in the hopes of increasing profit. The loan is usually paid back over a period of six months to a year (Branch & Cora 1999).

Training and education given by SACCO’s plays a very important role in the improvement the women’s incomes. Many gain knowledge in management of their businesses and saving skills plus capital, and can use it to start businesses and others to expand what they already have. The above can be a result of the training given before issuing out the loan. Thus those who don’t join SACCO’s may lose out on such benefits.

Although SACCO’s play a role as seen above, but they may fail to help the poor because of the outreach aspect. Most of them are located very far from where people stay. Poor women have to balance multiple roles. They are mothers, economic producers and community workers. This means that they have limited free time to travel to a financial institution. The travel cost may be a barrier to the poor and in most cases the free time available coincides with their business operating hours. This may hinder credit access and again income improvement (Bugembe 2005).

In addition factor like the attitude of finance officers may also lead to failure of the poor people in general to access credit, this is because the poor especially women are still considered as unbankable by credit officers. In most cases they are rude even during training sessions. The literacy level of the borrowers may also affect access and effectiveness of small loan credit. Application forms and finance officers are not intellectually sensitive to the needs related to the literacy level of the male and female borrowers,(Wilkinson 1999).

To mention also is the lending method used by the SACCO may affect the effectiveness and access of small loan credit group or individual lending in this case. SACCO’s have failed to know which method best suits the type of borrowers they may have. Group lending is the main method used by SACCO’s but this does not mean to close the doors for other alternatives. A lending method acceptable to customers should be opted for ,(Wilkison 1999).

2.2   SACCOs and Socio-Economic Welfare levels among Women.

According to (Hyuha,1993) women’s Empowerment educates and empowers women who are homeless with the skills and confidence necessary to get a job, create a healthy lifestyle, and regain a home for themselves and their children. The ability of women to control their own fertility is absolutely fundamental to women’s empowerment and equality. When a woman can plan her family, she can plan the rest of her life. When she is healthy, she can be more productive. And when her reproductive rights—including the right to decide the number, timing and spacing of her children, and to make decisions regarding reproduction free of discrimination, coercion and violence—are promoted and protected, she has freedom to participate more fully and equally in society.

To reduce the income gap (inequality) , the poverty eradication action plan (PEAP) emphasis among other things the strategic improvement of access to  credit by the poor through the savings and credit cooperatives.

Credit is considered to be an essential in put to increase small scale enterprises. It is believed that credit boosts income levels , increases employment at the household level and thereby alleviates poverty. Credit enables poor people overcome their liquidity constraints and undertake some investments, especially in improved farm technology and inputs, thereby leading to increased agricultural production,(Adugna and Hiedhues, 2000).

Further more; Credit helps poor people to smooth out their consumption patterns during the lean periods of the year (Binswanger and Khandker, 1995). By so doing credit maintains the productive capacity of urban poor rural households ( Heidhues, 1995). World bank (1989) also observed that improved consumption is an investment in the profitabiliy of the labour force.

According to Navajas et al (2000), the professed goal of micro credit is to improve the welfare of the poor as a result of better access to small loans. Diagne and Zeller (2001) argues that lack of adequate access to credit for the poor may have negative consequences for various household level outcomes including technology adoption, SMEs  profitability, food security, nutrition, health and overall welfare. Access to credit therefore affects welfare outcomes by alleviating the capital constraints on SMEs, hence enabling poor entrepreneurs with little or no savings to acquire capital. This reduces the opportunity costs of capital intensive assets relative to family labour, thus encouraging the adoption of labour-saving, higher-yielding technologies and therefore increasing capital and SMEs profitability. Access to credit in addition increases the poor households’ risk bearing ability, improves their risk copying strategies and enables consumption smoothing over time. By so doing, SACCO is argued to improve the welfare of the poor.

Rhyne and Otero (1992) argued that financially sustainable SACCOs with outreach have a greater likelihood of having a positive impact on poverty alleviation because they guarantee sustainable access to credit by the poor. Out reach is the number of clients served by SACCO. Financial sustainability on the other hand measures the extent to which the SACCO covers its operational and financial costs from internally generated revenues (interests and commissions).  SACCOs with higher repayment rates are more likely to be financially sustainable.

Buckely (1997) argued that the commonly touted indicators of success of micro credit programme relies on high repayment rates, outreach and financial sustainability but says nothing about the impact on micro enterprise operations on livelihood and only tantamount to “savings and credit evangelism”. Based on a study on three countries (Kenya, Malawi and Ghana), Buckley (1997) concluded that there was little evidence to suggest any  significant and sustained impact of savings and credit cooperative on beneficiaries in terms of micro entrepreneurs graduating to higher or more sophiscated operations, increased income flows and level of employment.

2.2.1 Women Engagement in Productive Ventures.

Women are mainly engaged in small scale business in the informal sector, they have many social responsibilities so it difficult for their businesses to graduate beyond the micro-stage because it is difficult for them to save and re-invest. Government economic policies have over time exposed women in business to stiff competition pushing many of them out of business. Many other women have been demobilized both in the public and private sector, more have ended up being unemployed and without any source of livelihood.

Without strong and efficient financial services, poor people have little chance of growing their wealth but it is certainly not only savings credit cooperative that is important; in some cases it may be the last tool needed. For example, in times of serious crises, a loan    or savings account may not be very helpful. Savings credit cooperative should be part of along term national strategy to grow and develop, strengthen and stabilize its financial sector and economy (Tranonic 2005).

In Wakiso District, the women’s illiteracy level is higher than that of men this is confirmed by their enrollment rates in educational institutions as is the case in the rest of the country, where the rates decreases as one goes up the education ladder. This is caused by the increasing rates of girls dropping out of school due to early pregnancies, domestic labor, poverty and early marriages (Police strategic plan 2007).

Poor health status among women is aggravated by the low level of education, low level of use of contraceptives and because of their poorer economic status and gender relations at household level. Women are the direct care givers in society in Wakiso District and because of this health policy at all levels of society rarely target women’s personal health but rather target them as health agents for their families.

2.3 Challenges, hindrances and barriers faced by Women in accessing SACCO services

According to (Barrett,et al,2006) One of the ongoing challenges SACCOs face, is in optimizing customer satisfaction and developing customer Relationship Management. In order to raise customer satisfaction levels SACCOs must invest in selecting the correct people who not only have the functional, technical competence but also have the right attitude. Research has shown that attitude is the most important requirement skills and functional expertise can be thought. SACCOs must continuously develop, motivate and manage its employees to build customer relationship culture that relies on technical and interpersonal skills. SACCOs must invest in establishing efficient service delivery processes and procedures that appear transparent to the customer and improve on customer interaction with the SACCO, He adds that SACCOs must build in continuous improvement in service delivery especially when things go wrong by letting the numbers know about such situations in advance or timely. Trust is an important element in building customer relationship and as such honesty goes along way. While a SACCO may have valid reasons to with hold bad news, it is worth noting that a delay or distortion can do much more damage to a relationship than bad news quickly revealed.

2.4 Best way forward for full utilization of SACCOs on Women Welfare.

According to Bategeka, (1999), Feedback is another important element in maintaining good customers’ relations with members as this helps in improving service delivery. Staff should be trained to handle members’ complaints effectively by employing the right mix of empathy, apology and resolution. In order to deliver outstanding service, it is essential to build a customer relationship focused culture. This can take number of years can involve changing the way SACCOs according to(Sanchez-Urrelo,2006) operates in all aspects of service delivery. The time investment is long-term customer loyalty and helping to ensure business profitability. Introduction of website for information dissemination and e-banking: A website is a collection of information stored on a computer and seen on the World Wide Web. The website can be viewed locally or internationally making it the newest media used to exchange and gather information and ideas. It enables customers to find out all the information they need about the products, such as the services provided. The products offered product images with specifics and costs, location of the business/organization and where the services are offered, and special offers to clients. Its advantage is that it reaches a global audience, and allows one to deliver the advertisement to a targeted audience in a manner that actually gets the message through to this targeted audience. As store, one can use a website to sell products and take orders for services round the clock without involvement of humans as the entire process can be automated,Education is a core strategy and campaigns have to direct at helping people to understand the importance of savings mobilizations. As more people move into gainful employment, families begin to have more money that can be directed towards savings. Education and training forms an integral part in the promotion of the union services and relevant issues in the management of SACCOs,(Wegoye,2006).The union renders various services such as the promoting SACCOs, members’ education and conduct of National and Regional seminars for delegates. The Union also deals with capacity building, training, marketing, credit, monitoring and evaluation and evaluation of SACCOs activities. KUSCO has a team of highly qualified and experienced multi- disciplinary professionals who are experts in their fields of specialization. They provide consultancy services to affiliates and individual members at a modest cost including feasibility studies, training needs analysis, curriculum development, salary and benefits survey, strategic planning, job description and job evaluation and organizational strategy and restructuring. They also provide services including monitoring and evaluation of SACCOs with Front Office Activity and application of sound corporate governance and best practices issues. They offer additional services to SACCOs such as recruitment of staff to create a good working environment so that members are given quality services to towards their savings mobilization.

Regulatory Framework is regulatory and legal framework which needs to undergo through the necessary legislative development concurrently with the imperative of designing management and accounting systems appropriate for financial cooperatives and building capacity among the SACCOs. The development of SACCOs regulatory framework is an ever-changing phenomenon and it there is therefore need to learn from countries that have progressed more in the SACCO field on savings mobilization. Monitoring and mentorship of cooperatives; SACCOs are to be constantly monitored to find out whether they comply with Cooperative Act, Cooperative Banks Act, their own internal By Laws and internal documents like business plans and Budgets. Such constant monitoring can lead to improvements in management practices of the SACCOs on savings mobilization,(Adugna,2000).

Developing savings mobilization culture: this is done by adjusting the focus and change of habits because savings is a culture, a habit and a way of life. When a culture is developed wealth starts to grow,(Mwangi,2008).The development of a savings culture entails the destruction of old and useless in-built habits and principles, and the assimilation of new ones. This is a commitment toward the participation in this socio-economic revolution brought about by SACCOs by saving regularly at least 5% of ones salary, or other income into a SACCO so that through the strength of numbers, the pool of savings mobilization created could be a source of cheap credit guaranteed could be source of cheap credit guaranteed only by the members of the SACCO.

Promoting of a savings mobilization culture – the reduction of consumption trends and reliance on easy-to-obtain loans should be discouraged through sensitizing campaigns to help change the culture of expenditure on unnecessary goods, and learning how to produce some of the basic items like vegetables, fruits and maize and rice. A culture of savings needs to be inculcated amongst all young and old people. The starting point is in schools where a cooperative curriculum should be developed and taught at all levels of the school system. The formation of Savings and Credit Cooperatives in all work places should be made mandatory, while encouraging the formation of savings clubs in our educational institutions. Countries like have introduced cooperative training in schools,(Cooperative Digest,2007/2008).

Change of attitude and dependence syndrome – an attitude of dependence should be discouraged in the society so that individuals can mobilize themselves and produce goods and services or individuals can come together, work together and save. This can be done by denitrifying opinion leaders in the country and let them travel outside the country to see what the other people have done for themselves,(Cooperative Digest,2007/2008).

Funding of unviable cooperatives: the government should fund a SACCO to become strong because wholesale lending of funds to a weak SACCO runs the risk of doing more harm than good when it is lent to performing portofilios. Wholesale loans to a SACCO can impact the savings mobilization culture of the members positively or negatively. However, the change in a SACCO’s savings culture depends more on the quality of management and governance.

Adequate institutional support structure; this can be done by creating instructional support structures for SACCOs by introducing provincial and district cooperative officer in charge of all cooperative staff and activities and other cooperative officers supervising specific cooperative activities such as savings and credit, agricultural cooperatives, housing cooperatives and handicraft cooperatives among others. Efficient capacity building in cooperative to be enforced since the success of SACCOs is largely dependent on the quality of human resources, governance and management,(Evans,2002).

2.5 Conclusions

To conclude this chapter, the establishment of Saccos in Uganda, is expected to act as a channel through which investible resources are mobilized and tapped. However, to achieve this, there is need to have the necessary conducive environment in place, short of which the objectives of SACCOs will not be realized. Most foregoing authors have given the general conditions necessary for a SACCOs to flourish, but there is a research gap to fill in relation to the contribution of SACCOs towards socio-economic Welfare of Women.

CHAPTER THREE

METHODOLOGY

3.0 Introduction

This chapter covers research design, study population& sample size, Sample method & sample procedure, Data sources, Research instruments,   data processing, analysis, presentation and limitations.

3.1 Research design

Descriptive research design was used. It was built on descriptive and identified the reasons for the occurrences. It looked for causes and reasons of the current status of the subject in the study. The study used descriptive research design, which utilized both qualitative, and quantitative analysis. The design was suggested because it enabled the research to capture respondents’ views in their own words.

3.2 Target population

The population interest in this study consisted of 1 manager, 14 SACCO members,1 LC1 and 4 loan officers. Other members were from Focus group discussion. Target population was 25. The target population was selected by random sampling, where SACCOs and members were selected and leaving out non members. The researcher choose Nsangi Savings and Cooperative society because of the limited time, prevalence of SACCOs, economic and budgetary constraints, and being a pilot area for all types of business venture initiative in Wakiso District. In addition, Nsangi Sub county has most SACCOs comparatively.

3.3 Sampling size.

The sample size was 25 respondents. The random sampling method was used because sampling is a statistical determination of the appropriate sample size which can be generalized to present the entire target population (Handy 1991) and was computed by a formula for Krejcie and Morgan 1970

3.3.1 Sampling method

Random sampling technique was used to determine the sample size. Respondents were grouped in strata and Stratified random sampling purposive sampling was used in each strata to get the information and simple random sampling was used to limit on the biasness of purposive sampling.

3.3.2 Sampling procedure

Respondents were grouped into strata and purposive sampling was conducted in each strata to get relevant information for the study with out any bias.

Purposive sampling where sample elements were selected by the researcher because of their unique roles they  played in providing the necessary information for the study, though selection of respondents, the sample was obtained, the sample provided the necessary data for the purpose of the study.

3.4 Sources of data

The data was obtained from both primary and secondary sources. Primary data was collected from respondents through issue of questionnaires and interviews. Secondary data sources was  mainly through a review of previous works in the subject matter with a view to finding out any existing gaps that the research study tried to fill. These secondary sources included information sought from journals and government reports. This method is cheap and time saving.

3.5 Data collection Instruments.

The technique of collecting the data was questionnaires and interview guide. (Structured and unstructured) and the questions will be well examined and make unambiguous. These questionnaires were administered by the researcher himself for purpose of explaining to the respondents the reason for the research and receive appropriate and reliable information from the respondents. The researcher interviewed the respondents which helped to collect data from respondents. Face to face discussions was conducted by researcher together with respondents in order to get the information necessary for the study.

3.6    Data processing, Analysis, and presentation

3.6.1 Data processing

Qualitative data collected was first coded in the coding process, a coding sheet was constructed, and a number was then assigned to each answer in the questionnaire with a corresponding number on the coding sheet.

3.6.2    Data analysis and presentation

Two types of data were collected in this study: Qualitative and quantitative, and two types of statistical analysis were used. The quantitative data analyzed the descriptive statistics, which included frequencies, percentages and measures of central tendency like means; while the qualitative data analyze the content analysis. The analyzed data was presented using tables, charts and figures.

3.7 Reliability and Validity of Data

To obtain data free from errors introduced by those responsible for collecting them, it was necessary for the researcher to do pilot/pretest and do constant verifier as the data is being collected. The researcher made checkups to ensure that the data collecting assistants perform their duty honestly and without prejudice. When data is collected, it was examined for completeness, comprehensibility, consistency and reliability. The accuracy of tabulation and accuracy of punching was checked and ensured.

3.8 Scope and Limitations of the Study

Time available for the research was not enough. The researcher had many other important obligations to attend to including exams and course works. However, the researcher ensured that the time available was efficiently used according to the laid out schedule.

Finance is also inadequate, and this will strain the researcher.  The ever-increasing transport cost is a big pain for example, stationery, internet and cost of library materials.

Some respondents are likely to give false information in order to please the researcher and this will undermine the reliability of the research findings. However, the researcher carefully and tactfully interacted with respondents and managed to get the data of interest for the study.

CHAPTER FOUR

EMPIRICAL ANALYSIS

4.0 Introduction

This chapter captures data presentation, analysis and interpretation of findings in relation to the study objectives stated in chapter one that is to examine the different types of services that SACCOs offer to Women in Nsangi Sub county, to establish the Social economic Welfare levels among Women in Nsangi Sub county, to find out the challenges, hindrances and boundaries faced by Women in accessing SACCO services and to propose best way forward for full utilization of SACCOs on Women Welfare. The chapter analyzes data that was collected from ordinary people (men & women) loan officers and local council1 official. Data was collected using questionnaire, interview guide and in some instances I held focus group discussions

4.1 Data Presentation  

From the 20 questionnaires administered, 19 were collected and found usable for analysis. This indicates that the response rate was 95.7%. Given that this was a descriptive research, the response rate is acceptable for the study as most descriptive research usually exhibit lower response rates. The majority of the respondents were female, who were 20 out of 25 while the male were 5 between the ages 30-55. (Source: Survey data, 2015).

4.1.1 Findings on Social demographic characteristics of the respondents.

4.1.2 Findings on Gender of Respondents

Table 4.1: Showing the Respondents Gender

Source: Primary data

The table above show that most of the respondents 20 (80%) were Females and 05(20%) were males.

4.1.3 Findings on age of Respondents

Table 4.2: Showing the Respondents Age

Source: Primary data

From the table above the majority of the respondents fall in the Age bracket from 31-40

(52%), followed by the Age bracket above 41-50 (28%) and lastly 51 and above (20%).

4.1.4 Findings on Marital Status

Table 4.3: Showing the Respondents’ Marital Status

Source: Primary data

From the table above, the majorities of the respondents were married 12(48%) and followed by widows 06(24%).

4.1.5 Findings on Education level of the respondents

Table 4.4: Showing the Education level of the respondents.

Source: Primary data

From the table above the highest number of respondents 12(48%) had gone to secondary level i.e. 0’level and A’ level, and 06(31.5%) had gone to tertiary institutions i.e. college and university.

4.1.6 Findings on Number of Dependants

Table 4.5: Showing the Number of Dependants

Source: Primary data

From the table above, the majority of the respondents had 4-6 dependants and non above 10.

4.1.7 Findings on occupation of respondents

Table 4.6: Showing the respondents occupation

Source: Primary data

From the table above, a significantly higher proportion of households (48%) had a member with salaried employment; therefore being eligible for salary loans and these mostly included Teachers, Parish chiefs and other civil servants. Other sources of income for households included business with 12% of SACCO members.

4.1.8 Findings on different types of services that SACCOs offer to Women in Nsangi Sub county .

4.1.9 Findings on Membership   Duration

Table 4.7 : Showing the Duration of Member

Source: Primary data

From the table above, the majority of the respondents 12 (48%) have been members between 0-6months and 01 (4%) above two years.

4.1.10 Findings on number of times the members had received credit.

Table 4.8: Showing Number of times the members had received credit.

Source: Primary data

From the table above, the data indicates that 28% of the respondents had received credit at least 07 times, 31.5% had borrowed 06 times, 8% borrowed 2 times while 28% had borrowed 04 times.

4.1.11 Findings on loan acquisition and accessibility

Table 4.9: Ease with which loans can be accessed by Nsangi SACCO clients

Source: Primary data

From the table above the majority of the respondents were able to access the loans relatively easy 09(48%) compared to 28% who had difficulties in accessing credit.

4.1.12 Findings on Interest Rate on the loan per year

Table 4.10: Showing the interest rate on the loan per year

Source: Primary data

From the table above the majority of the respondents interviewed 48% felt that the interest rates charged on their loans were low, while only 12% found the interest rate to be high.

4.1.13  Findings on Loan Utilization.

Table 4.11: Showing Loan Utilization

Source: Primary data

From the table above, the majority of the respondents 13(52%) have utilized their loans for starting up smalls scale business like Kiosk, Market Vending while only 2 (8%) used their loans on paying school fees. 

4.1.14   Findings on Capital improvement of respondents.

Table   4.1: Showing the capital improvement of the respondents.

Source: Primary data

From the table above, the majority of the respondents their capital 12(48%) was above 900,000 while only 3(12%) their capital was from 100,000-300,000.

4.1.15 Findings on Respondents who benefited from Nsangi SACCO

Table  4. 13: Showing how the members had benefited from Nsangi SACCO

Source: Primary data

The respondents were asked whether participation in SACCO programs has benefited them. The majority of the respondents felt that they had attained a real change in their lives as compared to themselves before they joined Nsangi SACCO. Many felt that they can educate their children, pay medical bills and afford a nutritious for their households. On a business level, 48% of the respondents felt that they had managed to acquire capital and hence improve their businesses. 4.1.16 Findings on challenges, hindrances and barriers faced by women in accessing SACCO services as advanced by respondents

Table  4.2: Showing challenges, hindrances and barriers faced by women in accessing SACCO services as advanced by respondents

Source: Primary data

From the above table findings indicate that lack of enough to borrow, delay in loan processing, need for collateral scored 16% while high interest rate scored 24% , limited time to pay had 12%,and the least was failure to get guarantors with 4%.

Table   4. 15: Showing best way forward for full utilization of SACCO services on Women welfare as advanced by respondents

Source: Primary data

Findings indicated that the best way forward for full utilization of SACCO services on Women welfare was Lower lending rates with 28%, quick processing and improving customer care had 16%, increasing on time of payment and encouraging savings had 12%,giving collateral free loans and personal visit to reduce default had 8%.

4.2 Data Analysis

Data was analyzed basing on the background information of respondents and the objectives of the study

4.2.1 Gender

The study was gender balanced and the reason for females being many could have been due to the fact that the study targeted Women. Therefore findings in this study can be used for the generalized research.

 4.2.2 Age

Analysis shows that Nsangi SACCO considered age as a determining factor for credit disbursement since it is clear middle age respondents are the ones that accessed credit with very few respondents past the age of 40 years and visibly no members below the age of 20-30   because they lack collateral and most of them lack tangible employment to be able to save with the SACCO.

4.2.3 Marital status

Analysis shows that marital status influenced loan acquisition ability since most married people are more settled with well-established homes and have collaterals as opposed to the singles that can easily disappear with the loan funds hence posing higher risk to the institution’s funds. However, widows can easily acquire loans since they are in control of the family assets in most cases and can use them as collateral.

4.2.4 Education levels

Analysis shows that Education level of the borrower was significant in credit acquisition given that those that had gone to secondary level and tertiary institutions i.e. holders of degrees and diplomas were more of members than those who had stopped primary level or had not gone to school at all.

4.2.5 Number of Dependants

Analysis shows that there is an indicator that most of the members have got many dependants and therefore they cannot save and invest their savings in any profitable businesses.

 4.2.6 Membership Duration

The study indicated that most of the members joined Nsangi SACCO recently.

 4.2.7 Number of times the members had received credit.

The implication of this finding is that due to experience in credit use by most of the respondents, fewer problems could be encountered in credit procurement which also highlights the relative ease with which credit was accessed by most of the members. This also implies that the more the borrowers use credit, the less the likely problems.

4.2.8 Loan acquisition and accessibility

The study shows that most of the borrowers have the requirements such as savings and collateral, whereas those who had found it difficult to access credit did not meet the requirements.

4.2.9 Interest Rate on the loan per year

The study implies that the majority of the members that had borrowed from the SACCO, felt that the interest rates charged by the Nsangi SACCO to be comfortable. This could have contributed to the ease on the members faced in paying back their loans.

4.2.10  Loan Utilization.

The study indicates that investment in small scale medium enterprises is one of the main reasons for borrowing amongst other purposes.

I further examined responses from key informants and FGDs and they confirm to the same reasons as those advanced by survey respondents. For instance, a male Credit Officer with Nsangi  SACCO noted that;

Majority of our members are business men and women, so they get credit to improve on their business capital. Some get school fees loan to pay school fees for their children… (Key informant, Nsangi  SACCO, ).

In addition another 35 year old woman FGD participant in Manja –Nakatema  explained that;

I got a loan from Nsangi SACCO  as an Individual loan to enhance my businesses (FGD Participant).

Likewise, another woman in the same FGD said that;

I got a loan from Nsangi SACCO , they gave us money as a group to buy farming items, seeds and materials. We got the money and shared it amongst ourselves as members of the group…and after harvest; we were required to pay back the money (FGD participant).

I observed that there were variations in respondents reasons for borrowing loans. The reasons mentioned by respondents were hinged on their respective need(s) and at a glance business was one such outstanding reason mentioned by respondents. Credit for business is important because it ensure sustainability of the loan service, as the borrower is able to realize some profit from business (Okorut et al 2004). Credit access fills the depression of the financial inadequacy for majority of the low income people. As a result, credit access revamps the productive capacity of poor members of the household (Johnson and Rogaly 1997). This means that loans empower poor people to take part in income generating activities and as a result this improves on welfare of the low income earners in our society. Indeed without the intervention of small loans, many poor household members would not be able to startup businesses, meet the physiological needs like medical care, school fees and food among others.

Respondents further enumerated various business ventures such as market vending, saloon, retail shop, food eating places, charcoal selling, trade in second hand clothes and agriculture among others, in which micro-credit is invested. Studies elsewhere also show that low income people engage in several income generating ventures. For example, Mogale (2007:347) in his progress report about the role of microfinance in poverty reduction in South Africa argue that; microfinance loans enable small micro-enterprise owners to enhance their business volume and improve on business opportunities to diversify their business portfolio.

4.2.11 SACCO Services

The SACCOs provide credit facilities which include Advances, Short term and Emergency. The study found out that 2% moderately disagreed, 21% agreed, 34% moderately agreed, and 44% strongly agreed. The mean score of 4.19 shows that SACCOs provide credit facilities.This implies that credit facilities are essential to the Sacco members and the majority of the respondents strongly agreed with the statement.

The study found that SACCOs offer varied range of products to meet the needs of their members and ranked them as ordinary savings at 20.8%, fixed savings at 52.1%, current savings at 6.3% and school fees at 19.8% and others 1.1% respectively. The long-term and short-term loans were purposely granted for school fees, development or debt settlement. It was noted that 23% agreed, 56% moderately agreed while 21% strongly agreed. The mean score was 3.98 indicating that the respondents were in agreement that loans are granted for development purposes. It implies that most of the Sacco members do take both short and long term loans purposely for development, since members can easily access loans without difficulties. On the products that SACCOs offer to its members, the study revealed that 45% fairly agreed, 25% had no idea, 50% fairly agreed while 21% strongly agreed. The mean score of 3.88 shows that the respondents agreed with the products the SACCOS offered to its members.

This implies that the SACCOs do offer various products in respect to savings, loans and insurance, members are also satisfied with these products as compared to other institutions as they prefer their own loans other than the banks. On qualitative analysis, financial services in the form of savings products loan products and insurance as a cooperative strategy aimed at improving savings which lead to capital accumulation leading high incomes and improve quality of members’ lives. Means of insurance played the role of insurance against income loses emergencies, and health. Savings would compensate for uneven stream of cash flow by keeping then excess income (cash) and use it during the time of shortage. From the findings it showed a mean score of 4.19 that SACCOs provided credit facilities to members, a mean score of 3.98 that loans were granted for development purposes, a mean score of 3.8 that the products SACCOs offered were varied. This is in line with Branch & Cora, (1999). Who asserts that SACCO’s play an important role in lowering income groups through increasing their assets via establishing a credit relationship, establishing an enterprise, accessing working capital, increasing income through business expansion, meeting housing credit needs and increasing wealth through savings

This implies that there was a marked improvement in capital after accessing the SACCO loans.

Complementary data from key informants also revealed that SACCOs are the main credit lending institutions to majority of low income earners in Nsangi Sub County. For example, one respondent by the name of Jane, a primary teacher at Nsangi Primary School narrated a story of her experience in borrowing small loans from SACCOs.

When I was staying in Kitemu, I had my first loan from Women Trust in 2002 (now known as Uganda Finance Trust Ltd) and I did not have problems with paying back because am a salary earner. The second loan was from NAKOPESA (salary loan) and the third loan was from Uganda microfinance (now calledEquity Bank Uganda). Since I came to Nsangi, I got a loan from Nsangi SACCO, however I was disappointed when one group member defaulted and we had to raise money as group members for her loan repayment. I am now having a loan with BRAC, FAULU Uganda limited and FINCA. And BRAC is fair compared to others, because of low income friendly school fees loan and individual loan (key informant, Kitemu-Kyambazi Zone).

In addition, Jane explains that loans have helped her to establish some income generating activities in addition to being a teacher. She is also self-employed and takes care of a big family of over nine children; in terms of feeding, medical care and school fees and other necessities. She explained while pointing at her children who were in the sitting room at the time of the interview. She has borrowed money from different credit schemes such as group loan, salary loan from FINCA, BRAC, Pride MF Uganda and Nsangi SACCO. She is proud of having got loans from almost all SACCOs and MFIs in the area and having such a good credit history. My observation is that poor people often get loans from credit institutions where either one of their relative, friends, neighbors and business associates had also ever borrowed. In this case, social support plays a key role in encouraging credit users to take a risky but inevitable venture of borrowing which sometimes redeems the poor from the poverty.

4.2.12 Challenges, hindrances and barriers faced by women in accessing SACCO services

Respondents were asked whether in their own view, there were any challenge, hindrance and barrier with Nsangi SACCO services. To this, there was unanimous agreement among respondents of existence of Challenges, hindrances and barrier with Nsangi SACCO services in general. The Challenges, hindrances and barriers given include; Delays in loan processing due to bureaucratic tendencies resulting into increased costs, late investment of the acquired funds which could in turn result into delinquency in payment, High interest rates, limited time of payment and harsh treatment from some SACCO officials were the other challenges hindrances and barriers the members faced. Only a very small percentage of all respondents indicated that they had not obtained the required amount that they had applied for. This implies that access to the required loan money for most members was not a problem, but rather high interest rates, unwillingness of guarantors and other problems as shown in the table above. This is also in line with Barrett,et al,(2006) who asserts that poor customer Relationship Management is a key challenge to women in accessing SACCO services.

4.2.13   Best way forward for full utilization of SACCO services on Women welfare

Finally, the respondents were asked to suggest the possible ways through which SACCOs can improve their services. The responses given include lowering of lending rates by the institutions to make the loans more affordable for clients, quick processing of loans to reduce bureaucracy hence minimize costs and thus give loans in time to increase their timely utilization by the clients, increased time for payment. Improving customer care and encouraging of members to save and thus be given loans basing on their saving were also possible solutions advanced by the respondents as shown above. This is in line with Bategeka, (1999), who asserts that  good customers’ relations with members helps in improving service delivery.

Further, findings from key informants showed that respondents are interested in borrowing and using loans, but also they are mindful of the dynamics accruing to using borrowed money for business. For example a male FGD participant noted that;

… reducing on the months so as to manage the loans, help us to reduce on the interest rates so as to make the lower income earners to go in for the loans. Avoiding taking the other members‟ property/assets in case one member of the group members fails to pay back, avoiding grabbing the other members‟ savings in case of defaulting, government should come up to increase the license fees charged on these institutions, because they also over charge us with the interest rates and should always make checks and monitor SACCOs  (FGD).

Further, internally credit users ought to organize themselves and plan for the credit, but also externally the credit institutions should tailor their services to the needs and circumstances of the clients, in a more suitable and sustainable way for the mutual benefit and credit lending institutions.

CHAPTER FIVE

SUMMARY, CONCLUSIONS AND RECOMMENDATIONS

5.1 Introduction

This chapter involves summary of major findings, conclusion and recommendations. The summary is based on the major findings on the study objectives and the recommendations are based on the discussion of the findings and analysis as well as interpretation of findings

5.2 Summary of Major Findings

5.2.1 Findings on different types of services that SACCOs offer to Women in Nsangi Subcounty Findings revealed that Nsangi SACCO provided its members with SACCO loans, savings promotion of cooperation, spiritual transformation, training of the members, outreach services/sensitization.

 5.2.2 Findings on the effects of SACCOs on socio economic Welfare levels among Women in Nsangi Subcounty

Regarding the effect of Financial Services as a cooperative strategy on members’ saving mobilizations, the study found that financial services had a minimal impact on saving mobilization. The study found out that cooperative strategies have a significant positive effect level of statistical significance on members’ savings mobilization. Therefore cooperative strategies positively influence members’ savings mobilization.

Findings revealed that majority of the respondents 15(20%) were of the view that members were poor. When further interviewed they said that major cause of poverty was lack of accessibility to SACCO loans before they started their operations, But after accessing the SACCO loans there was a marked improvement in their capital and poverty has reduced.

5.2.3 Findings on the challenges hindrances and barriers faced by Women in accessing SACCO services

Findings revealed that the Challenges, hindrances and barriers were; Delays in loan processing due to bureaucratic tendencies resulting into increased costs, late investment of the acquired funds which could in turn result into delinquency in payment, High interest rates, limited time of payment and harsh treatment from some SACCO officials, high interest rates and unwillingness of guarantors

5.2.4 Findings on best way forward for full utilization of SACCOs on Women Welfare

Findings revealed that lowering of lending rates by the institutions to make the loans more affordable for clients, quick processing of loans to reduce bureaucracy hence minimize costs and thus give loans in time to increase their timely utilization by the clients, increased time for payment. Improving customer care and encouraging of members to save and thus be given loans basing on their saving were the best way forward as  advanced by the respondents through which SACCOs can improve their services.

5.3 Conclusions

5.3.1 Conclusion on different types of services that SACCOs offer to Women in Nsangi Subcounty

The research findings concluded that training on savings mobilization in totality is a vital strategy to improve savings mobilization of SACCO members. Equally important was acknowledgment of regular and best savers in form of certificates and other rewards, development of new savings products, compulsory savings and rising of saving to loan ratio. When SACCO members are guided and encouraged through groups and given reasons why it may be necessary for them to save was revealed in the study that training has a high multiplier effect on members’ savings mobilization. The study also revealed that Training requirement and SACCOs management system had an average positive influence on saving mobilization.

5.3.2 Conclusion on the effects of SACCOs on socio economic Welfare levels among Women in Nsangi Subcounty

It can be concluded that SACCO loans have played a significant strategic role in providing the bulk of capital used by small and medium scale enterprises in poverty reduction. On the effect of investment opportunities, the study revealed a strong positive effect on saving mobilization in SACCOs. The study also found out that family size, children in schools and income level have strong significant effect on SACCO members’ savings mobilization which findings are in agreement with Ddumba and Obwoma (1998) study.

 5.3.3 Conclusion on the challenges hindrances and barriers faced by Women in accessing SACCO services

The study concluded that the Challenges, hindrances and barriers faced by Women in assessing SACCO services were; Delays in loan processing due to bureaucratic tendencies resulting into increased costs, late investment of the acquired funds which could in turn result into delinquency in payment, High interest rates, limited time of payment and harsh treatment from some SACCO officials, high interest rates and unwillingness of guarantors

5.3.4 Conclusion on the best way forward for full utilization of SACCOs on Women Welfare.

The study concluded that lowering of lending rates by the institutions to make the loans more affordable for clients, quick processing of loans to reduce bureaucracy hence minimize costs and thus give loans in time to increase their timely utilization by the clients, increased time for payment. Improving customer care and encouraging of members to save and thus be given loans basing on their saving were the best way forward as  advanced by the respondents through which SACCOs can improve their services.

5.4 Recommendations

The government through the Ministry of Cooperative Development and Marketing, and other stakeholders should help SACCOs carryout member education and training about SACCOs operations, loans, shares and more importantly savings mobilization;.

 SACCOs should adopt competition that requires effective risk management, effective savings mobilization strategies on members’ savings mobilization and see the need to develop marketing and new products/services strategies to make members to benefit from competitive interest rates on loans borrowed and to provide a wider selection of financial products/services. SACCO members should be made to appreciate that they are the owners and customers of the SACCOs for the realization of maximum results and reward of best and regular savers, should be taken seriously by SACCOs’ management.

 The government through the Ministry of Cooperative and Marketing should strengthen supervision, licensing and facilitate SACCOs to acquire bank codes to handle salaries for the professional members and also regulate SACCOs so as to attract new members and retain old ones and embrace the Old Age Savings Insurance Scheme to meet the special needs of cooperative members it serves as a high interest long-term Old Age Savings Scheme with added Life Assurance and, it also helps to meet day to day trading needs.

 SACCOs should adopt a dynamic and aggressive policy to encourage savings by enhancing public confidence in the micro-finance industry, providing cost-effective schemes for small depositors and more importantly, they must be seen by the public to be concerned not only with balancing their books but also, with promoting members’ welfare and prosperity.

 Nsangi Sacco should fund savings mobilization oriented activities. Savings may be mandatory or voluntary. Savings are important for any economy as earlier pointed out. The provision of savings services apart from credit to the people helps them in developing good saving culture, saving in more efficient ways instead of investing in assets, which are costly to maintain and stand the risk of losing value or being lost and also help fund Research and Development (R&D) in SACCOs so that, they can offer valuable products tailored to meeting not only wants of the members but also their needs. Savings generally represent an untapped resource which if properly exploited would stimulate economic growth and improve savings mobilization rate of Kenya; They should also help promote consumer education and promotional programmes in SACCOs so that members can be become more aware of their rights and obligations;

 The SACCOs should adequately monitor the groups on loan utilization so that it should not misappropriate to non-income generating activities.

 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.

 Savings and credit cooperatives should reduce the minimum requirement for the members, such as interest rate and security required because this has limited on the accessibility of loans.

 Education, training and sensitization of the members and the general public about the utilization of loans acquired. This must be in line with poverty reduction.

 The loans should be given to organized groups such as the women groups which can be easily traced in case of any default instead of giving it to single individuals who may fail to pay the loans given out.  To reduce the poverty level people should be encouraged to join the SACCOs and develop the spirit of savings and entrepreneurship.

5.5   Suggested Areas of further research

There is need for more studies in this area to establish other factors other than the ones covered in this study because the studied factors 57.8 % variation in the saving mobilizations; therefore factors that account for the remaining 42.2% which might have a significant effect on saving mobilizations and the influence of governance on SACCOs performance and development needs to be researched.

 Further research need to be carried out on the role of commercial banks loans on poverty reduction in Uganda.

Role of SACCOs in facilitating rural financing.

References

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KYAMBOGO UNIVERSITY

APPENDICES

 APPENDIX 1

QUESTIONNAIRE TO BE FILLED BY MEMBERS OF NSANGI SAVINGS AND COOPERATIVE SOCIETY

Dear Sir/Madam,

This questionnaire is intended to collect information for the study of the Impact of SACCOs on socio-economic welfare of Women in Wakiso district. The research has been designed purely for academic purposes. It is only through your response that the study can be completed successfully. The researcher requests you for some of your precious time to answer the following questions. Most questions require ticking and circling where applicable, while others require filling in as need arise. Information given will be accorded the highest degree of confidentially.

SECTION A: GENERAL INFORMATION

1. Demographic data of the respondents

a). Sex

Male

Female

b). Marital status

Married

Single

Widowed

Divorced

c). Religion

Catholic

Protestant

Born again

Moslem

SDA

Others specify …………………………….

1. d) Age

Below 30

31 – 40

41 – 50

51 and above

1. e) Educational Background

None

Primary

Secondary

Certificate

Diploma

Degree

Others (Specify)……………………………….

1. f) How many dependants live in your household?

1. What do you do as a means of living (Occupation)?

Unemployed

Self-employed

Employed

Others (specify)

SECTION B: TYPES OF SERVICES THAT SACCOS OFFER TO WOMEN IN NSANGI SUBCOUNTY.

2) For how long have you been a member of this SACCO?

3) When did this SACCO start its operation?

2012                       2013                 2014                  others specify……………

4) Have you ever received a loan from this SACCO?

Yes                                No

1. b) How easy was it?

1. c) If you think it was easy, Why?

……………………………………………………………………………………………

1. d) If you think it was difficult, Why?

……………………………………………………………………………………………..

5) This SACCO charges interest rate on loan per year to its members

• What do you use the loan given to you for?

7) How much was your capital before you joined this SACCO or from the time you started the occupation.

8) How much is your capital now after joining this SACCO at least for the last one year?

SECTION C: THE SOCIAL ECONOMIC WELFARE LEVELS AMONG WOMEN

Please rate the following items according tothis rating scale:

• The level of incomes of Women has increased in relation to the existence of SACCO

• SACCO Loans are used as start-up capital

11) Have you ever visited any loan officer, credit officer, bank officer or agent in the last two years?

1. Yes
2. No

• If yes for Qn 12 above, which organization did you visit? …………………………………………………………………………………………

13) On which issues did you consult the officer above in (qn 12 above)?

1. Business management
2. Marketing and Customer care
3. Invest priority area/activity
4. Loan servicing

14) In you view, are there significant changes in your income because of using SACCO Srvices?

1. Yes
2. No

15) What indicators do you use to relate/rank your wellbeing/socio-economic welfare levels in relation to the rest of the community?

1. Size of land
2. Ability to pay school fees
3. Physical appearance
4. Ownership of household assets
5. Ability to feed
6. Ability to pay medical care

SECTION D: CHALLENGES, HINDRANCES AND BOUNDARIES FACED BY WOMEN IN ACCESSING SACCO SERVICES

16) Have you ever accessed any Loan facility from any group or institution? (If no skip to next Qn )

1. Yes
2. No

If yes ,name the organization (s)…………………………………………………. …….

If no ,why?

………………………………………………………………………………………………………………………………………………………………………………………………………………

17) Has any (other) member (s) in this household ever accessed any Loan facility?

1. Yes
2. No

18) If yes for Qn above, how many household members have ever accessed Laon facility?

…………………………………………………………………………………………………..

19) If yes still for qn  above, from which organization did the household member(s) access the Loan facility

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….

20) Women get Loan facility from the above organization to buy household necessities

(Qn 15)?

21) Did the Loan facility require any security or collateral?

Yes

No

22) Group security is a kind of security/collateral required for one to get credit facility Qn 12,

23) Did you use the credit facility for the planned activity or business?

1. Yes
2. No

If no why?

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

24) What is your view or opinion about accessing SACCO Services?

1. a) If positive explain; …………………………………………………………………………………………………….……………………………………………………………………………………………………………………
2. b) If negative explain; .…………………………………………………………………………………………………………………….……………………………………………………………………………………
3. c) Do not know explain; …………………………………………………………………………………………………………………………………….………………………………………………………………………..

25) Lack of Collateral security is one the problems meet in accessing SACCO Services.

26) High interest rates are some of the problems meet in utilizing the SACCO Services..

27) It is very easy to service the Loan facility from this SACCO.

• Inadequate market/ customers are some of the difficulties faced by women before joining the scheme.

SECTION E :  BEST WAY FORWARD FOR FULL UTILIZATION OF SACCOS ON WOMEN WELFARE.

• This SACCO has managed to achieve its objectives.

1. b) If no, explain briefly why?

i)…………………………………

ii)………………………………….

iii)…………………………………

30)  If yes, what have you managed to achieve with that increase in capital

Please specify below

i)…………………………………………………………………………….

ii)…………………………………………………………………………….

iii)……………………………………………………………………………

31) a) what problems are faced by members in acquiring SACCO loans?

………………………………………………………………………………………………………………………………………………………………………………………………………………

1. b) Suggest some measures to reduce these problems

………………………………………………………………………………………………………………………………………………………………………………………………………………

APPENDIX II

INTERVIEW GUIDE FOR MANAGERS

1. Some SACCOs have credit and Loan services while others do not have. What is the situation here?

……………………………………………………………………………………………………………………………………………………………………………………………………

2. When do Members access services in this SACCO?

……………………………………………………………………………………………………………………………………………………………………………………………………

3. What are some of the SACCO services offered to Members?

………………………………………………………………………………………………………………………………………………………………………………………………

4. How beneficial is the service offered to Members?

………………………………………………………………………………………………………………………………………………………………………………………………

5. What is the minimum amount needed to open a savings accounts?

………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

6. How much do you have as deposits/savings?

………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

7. What interest rates do savings accounts pay, and what interest rates are charged for loans?

………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

8. Have you ever received loan applications from members?

Yes                No

9. If yes, how many?

………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

10. And how many loan applications have you approved?

………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

11. How many people received the loans?

………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

12. Why didn’t some applicants receive loans?

………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

13. Why do they borrow?

………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

14. How long does it take to process a loan?

………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

15. In Some SACCOs, Members have Challenges in accessing services, in others they do not. What is the situation here? ………………………………………………………………………………………………………………………………………………………………………………………………

(ii) What kind of challenges?

………………………………………………………………………………………………………………………………………………………………………………………………

16. As a Manager what can be done to improve services in this SACCO?

…………………………………………………………………………………………………………………………………………………………………………………………………….

THANK YOU FOR YOUR PARTICIPATION.

APPENDIX III:

INTERVIEW GUIDE FOR LOCAL COUNCIL

1. How many SACCOs are within your area of jurisdiction?

………………………………………………………………………………………………………………………………………………………………………………………………………………

2. Of these, how many provide services to members.

………………………………………………………………………………………………………………………………………………………………………………………………………………

3(a). But in your own view , does it matter if Women are provided with SACCO services?

YES

NO

(Tick one)

1. If no, why do you say so?
2. If yes, of what value?

………………………………………………………………………………………………………………………………………………………………………………………………………………

4. What do you say about the support your office has given to make these Women be provided with SACCO services?

………………………………………………………………………………………………………………………………………………………………………………………………………………

5. What is your specific role in ensuring that Women get SACCO services?

………………………………………………………………………………………………………………………………………………………………………………………………………………

6. Is there any other important issue you would like to share about SACCO services?

……………………………………………………………………………………………………………………………………………………………………………………………………………….

APPENDIX 1V

QUESTIONNAIRE TO BE FILLED BY LOAN OFFICERS OF NSANGI SAVINGS AND COOPERATIVE SOCIETY

Dear Sir/Madam,

This questionnaire is intended to collect information for the study of the Impact of SACCOs on socio-economic welfare of Women in Wakiso district. The research has been designed purely for academic purposes. It is only through your response that the study can be completed successfully. The researcher requests you for some of your precious time to answer the following questions.

1. How long have you worked for this SACCO?

………………………………………………………………………………………………………………………………………………………………………………………………………………

2. How Clients have benefited from this SACCO?

………………………………………………………………………………………………………………………………………………………………………………………………………………

3. How SACCOs have changed the Lives of your Clients?

………………………………………………………………………………………………………

4. In your Opinion/view have the lives of Clients changed ever since they joined this SACCO?

………………………………………………………………………………………………………

5. What are the different types of services that SACCOs offer to Women in Nsangi Subcounty?

…………………………………………………………………………………………………

6. What are the challenges, hindrances and boundaries faced by Women in accessing SACCO services?

…………………………………………………………………………………………………

THANK YOU FOR YOUR CO-OPERATION