Research consultancy
ABSTRACT
This study investigates the contribution of Savings and Credit Cooperative Organizations (SACCOs) to poverty reduction among women in Nakawa Division, Kampala District. The specific objectives of the study included: examining the role of SACCO credit in poverty reduction, assessing the impact of financial advice on poverty alleviation, and analyzing how savings influence poverty levels among women.
Findings revealed that SACCOs play a vital role in empowering women economically. Services such as providing startup capital, training farmers to identify new opportunities, facilitating market access, supporting business expansion, and offering affordable loans with minimal conditions were significant contributors to poverty reduction. SACCOs also encouraged group savings, collective investment, peer financial advice, and access to financial literacy training, all of which enhanced women’s financial decision-making capacity. Moreover, SACCO members commonly invested saved funds, earned interest on savings, and accessed loans at favorable rates, improving household welfare and enabling asset accumulation.
The study recommends that the government increase financial support to SACCOs to expand their lending capacity, provide regular training for SACCO leaders, and develop comprehensive policy guidelines to improve SACCO operations and sustainability.
CHAPTER ONE: INTRODUCTION
1.0 Introduction
This chapter provides the background, problem statement, research objectives, questions, scope, justification, significance, hypotheses, conceptual framework, and definitions of key terms used in the study.
1.1 Background of the Study
Savings and Credit Cooperative Societies (SACCOs) are community-based financial institutions that facilitate savings mobilization and provide credit to members, especially those excluded from formal financial services. In developing countries like Uganda, SACCOs have emerged as critical tools for financial inclusion, particularly for women and rural populations.
Globally, financial inclusion initiatives, including the Village Savings and Loan Associations (VSLAs), have aimed at alleviating poverty through community-managed saving and lending mechanisms. These initiatives empower members—predominantly women—to save regularly, access affordable credit, invest in small-scale enterprises, and meet household needs. According to DFID’s Sustainable Livelihoods Framework, improving financial assets enhances individuals’ resilience to economic shocks and their capacity to meet livelihood goals.
In Uganda, especially in urban divisions like Nakawa, many women face poverty due to limited access to credit, poor financial literacy, and insecure income sources. SACCOs offer a feasible solution through tailored services, such as group saving, micro-lending, and financial education. However, challenges such as misuse of borrowed funds, poor loan recovery, and inadequate business skills persist, raising concerns about the actual effectiveness of SACCOs in improving women’s socio-economic status.
1.2 Problem Statement
Despite the proliferation of SACCOs in Nakawa Division, poverty levels among women remain significantly high. Reports from the Uganda Bureau of Statistics (UBOS) and UNDP indicate that many women in urban slums lack access to basic services and economic opportunities. Although SACCOs aim to provide financial support, findings from the Microfinance Support Centre (2018) suggest that many women misuse loans, lack entrepreneurial skills, and often default on repayments—sometimes leading to asset confiscation. This calls into question the true impact of SACCO services on women’s poverty alleviation in the division. The study, therefore, investigates how SACCO services—credit provision, financial advice, and savings—affect poverty reduction among women in Nakawa Division.
1.3 Objectives of the Study
General Objective:
To examine the contribution of SACCO services to poverty reduction among women in Nakawa Division, Kampala District.
Specific Objectives:
To assess the role of SACCO credit in reducing poverty among women.
To evaluate the impact of financial advice provided by SACCOs on women’s poverty levels.
To determine the influence of savings on poverty reduction among women in the study area.
1.4 Research Questions
What is the role of SACCO credit in poverty reduction among women?
How does financial advice from SACCOs affect poverty reduction among women?
What is the influence of savings on poverty alleviation in the study area?
1.5 Scope of the Study
Content Scope:
The study focused on how SACCO credit, financial advice, and savings contribute to poverty alleviation among women.
Geographical Scope:
The research was conducted in Nakawa Division, located in the eastern part of Kampala District.
Time Scope:
The study covered a five-year period from 2018 to 2022 and utilized relevant literature published from 2017 onward.
1.6 Justification of the Study
The Ugandan government’s Financial Inclusion Strategy (2017–2022) emphasizes women’s access to financial services as a pathway to inclusive growth. However, challenges remain in understanding whether current SACCO initiatives sufficiently empower women economically. This study is critical in uncovering gaps and offering insights into strengthening SACCOs as poverty alleviation tools.
1.7 Significance of the Study
To Policymakers: The study will guide the formulation of effective SACCO support policies.
To Financial Institutions and NGOs: Insights from the research can help design better financial products and training programs for women.
To Academicians and Researchers: The findings contribute to literature on microfinance and gendered poverty reduction strategies.
To SACCOs: The study will help SACCO leaders refine their services to better serve their members and ensure sustainability.
