The role of savings on poverty reduction in Northern Uganda

Abstract

The study sought to assess the role of savings on poverty reduction in Northern Uganda. The specific objectives of the study were; to establish the determinants of household savings, to assess the role of informal savings on poverty reduction and to assess the role of formal savings on poverty reduction. A Case study design of Kaabong district, Karamoja Sub Region in Northern Uganda was used. Primary data was collected from 36 respondents who were participants in VSLAs and bank saving. The people who had been participating in savings in either VSLAs groups or banks for a long time were purposively selected to make up the sample to establish whether there has been any significant contribution of those savings in their lives. Mean and standard deviation were used to establish what most people said of participation in savings vis-à-vis poverty reduction. The key findings of the study were as follows; age, marital status and education level are the key determinants of savings. Informal savings leads to increase in income levels of households, enables individual households access education and health services. Formal savings have a significant role on household income and access to education by household members. Formal savings does not play any role on individual household access to health services. Conclusively, and basing on the evidence selected, savings plays a significant role on poverty reduction manifested by increase in income levels of households, improved access to education and somewhat improved access to health services. It is therefore recommended that all the interested stakeholders specifically government and development partners should encourage saving mobilization. The community should be sensitized on the significance of savings. Consideration should also be made to link informal savings and formal savings as it will make it even better