The Effectiveness Of Saving And Credit Cooperatives On Income Enhancement Of Borrowers The Case Of Women Participants In Wereda 04 Kirkos Sub City Addis Ababa

Microcredit is being practiced in Ethiopia as a tool to deliver financial services tornhelp the poor reducing poverty. The saving and credit cooperatives(SACCOs) arerntherefore operational to address the problem of poverty by delivering micro creditrnparticularly to those low income members who participate in saving and creditrncooperatives organized by themselves. The ability of microfinance and microcreditrnprogrammes to alleviate poverty and enhance development is often debated andrnquestioned. In order to investigate the fundamental premise, this study examinedrnempirical evidence of saving and credit cooperatives (SACCO) to know their efficiency andrnaims to contribute to this literature by investigating their role on income enhancementrnof women members/ borrowers in Wereda 04, Kirkos sub-city, Addis Ababa, organizedrnby one of the largest NGO, WISE (Women in self Employment), using systematicrnrandom sampling technique taken from the total list of members (N=284). Hence, therntotal numbers of households interviewed were 121; out of the total (284) members inrnthe list using Yeman’s sampling formula. The data was collected from six yearsrn(2013-2018) of saving and a loan of the SACCO members. A household level surveyrnwas carried out to collect data about individuals receiving microcredit. Using arnquasi-experimental research design, this study supports the extant literature that foundrna positive role of SACCO programmes on enhancing the participants’ income,rnexpenditure, food and children’s education. In addition, the results reveal a significantrnpositive correlation between microcredit and an increase in recipients’ business profitsrnand capital. The study is referred to common challenges in microcredit business thatrnapparently microcredit institutions in Addis Ababa are facing. Lastly, the studyrnprovides some insights on how to enhance the programmes effectiveness on incomesrnimprovement. In general, for these programmes to be more effective in alleviatingrnpoverty a new paradigm or regulatory body is required to link microcredit institutionsrnwith each other, organize collective efforts, and make it more attached to the realrndevelopmental needs of the poor.

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