Performance of savings and credit co-operative societies and their impact on rural livelihoods: a case study of Morogoro rural and Mvomero districts, Tanzania
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Date
2004
Authors
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Publisher
Sokoine University of Agriculture.
Abstract
The study evaluated performance of savings and credit co-operative societies (SACCOS)
and assessed their impact on rural livelihoods in Morogoro rural and Mvomero Districts,
Tanzania. Specific objectives were; (i) to evaluate operational and financial performance of
rural SACCOS, (ii) to identify factors that determine farmers’ use of SACCOS services
and (iii) to assess the impact of credit on the use of modern agricultural inputs and rural
livelihoods. Primary data were collected through formal survey involving 75 borrowers
and 75 non-borrowers from Mgeta and Mkuyuni divisions. Secondary data were collected
from informal interviews with SACCOS’ officials and clerks, UMADEP officials,
supplemented by SACCOS’ financial reports. Qualitative analytical techniques employed
were descriptive methods such as means, cross tabulations and frequencies. Quantitative
methods included Multivariate Discriminant analysis, mean difference T-test, Pearson Chi-
square and one way Analysis of Variance (ANOVA). The SACCOS were found to have
good performance basing on annual increase in number of households served,
microfinance services for farm and off-farm activities, and in facilitating other project
funds. In financial aspects, the societies were able to raise capital from member shares,
saving deposits and interest from credits. Regardless of some few problems, the SACCOS
were able to have good credit repayment performance. Having house(s) as collateral and
farmers awareness of the importance of SACCOS’ services influenced their use of
financial services. Credit provided had impact on the usage of modem agricultural inputs.
Borrowers used more agricultural input than non-borrowers. Despite impact on farm inputs
used, the study found no significant impact on level of crop yield except for tomatoes. This
was attributed to small farm plots and low level of agrochemicals used due to higher input
price caused by poor infrastructure and price fluctuations. Borrowers had significantly
higher income and expenditure on basic needs (except on food) than non-borrowers (p<
0.05). There was no appreciable impact on farm tools and equipment used, but credit had
impact on borrowers’ types of livestock kept, some household utensils, housing materials
and value of assets. A system of monitoring and evaluation as a guide for developing
SACCOS in rural areas, ammendment of national land policy (1997b) and review of small
scale lending regulations are recommended for development of formal financial services in
rural areas.
Description
Master's Dissertation
Keywords
Savings, Credit, Co-operative, Societies, Rural livelihoods