Assessing the effect of savings and credit cooperative organization (sacco) on the economic empowerment of the people

Abstract

A savings and credit co-operative organization (SACCO) is a democratic, unique member driven, self-help cooperative. It is owned, governed and managed by its members who have the same common bond: working for the same employer, belonging to the same church, labor union, social fraternity or living/working in the same community. A savings and credit cooperative‟s membership is open to all who belong to the 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 each other at reasonable rates of interest. Interest is charged on loans, to cover the interest cost on savings and the cost of administration. There is no payment or profit to outside interest or internal owners. The members are the owners and the members decide how their money will be used for the benefit of each other. Economic empowerment is the capacity of all individuals in the society or community to participate in, contribute to and benefit from growth processes in ways that recognize the value of their contributions, respect their dignity and make it possible to negotiate a fairer distribution of the benefits of growth. This study assesses the effects of saving and credit cooperative organizations on the economic empowerment of the people with greater focus on establishing the roles of the SACCO in economic empowerment, find out the challenges facing the SACCO in the economic empowerment process and suggest the possible strategies to minimize the challenges facing the SACCO in empowering the people economically. Study employed questionnaire and interview as data collection methods and consequently questionnaire and interview guide as instruments. The researcher used purposive sampling technique to get the respondents and collect data from them, later these data collected were analyzed through categorization method by creating themes or topics and grouping of similar responses this was for qualitative data while quantitative data were entered into the computer and analyzed using excel program. Following the objectives, the study found out that Obia SACCO has the role to empower the people economically. This was being done through provision of services like loans to the members, providing the saving facilities to the members, training and education and providing financial management skills for the members to empower them economically. Hence all those led to the increments in the members income level, increased profit, improved livelihood and gaining of new skills in the management of their business