The Role of Community Saving Initiatives in Poverty Reduction: An Appraisal of Saving Groups in Alebtong District, Mid-North Uganda

Abstract

Purpose: This study examined the significance of saving groups on poverty reduction in Alebtong district. Three objectives guided the study, viz. (i) to determine the effect of shares provided by saving groups towards community development in Amugu sub-county; (ii) to assess the implication of saving groups towards poverty reduction in Amugu sub-county; and (iii) to discuss the challenges faced by saving groups in Amugu sub-county.

Methodology: The study employed a cross-sectional research design and data was collected using a structured questionnaire. Data was analysed in terms of descriptive statistics and correlational analysis using SPSS version 20 in order to ascertain the relationship between saving groups and poverty reduction.

Results: The study revealed that there is a significant positive relationship between saving groups and poverty reduction (r=0.389, p<0.01). This is realised through employment creation, access to financial services, quality education, quality health services, improvement in household resources, improved nutrition and acquisition of household assets. Shares provided by group members contribute towards community development through promoting access to loan, improving households living condition, promote access to quality education when borrowed, quality health care services, group members earn a lot of money at the end of every year and they get a lot of interest. It was further uncovered that several challenges affect saving groups, for example, inadequate capital, maltreatment from leaders, inadequate funding, corruption, less government support, high competition from the formal sector, inadequate training among group leaders and illiteracy. It was inferred that increased support, from the government of Uganda towards saving groups can promote normal functionality besides financial security. And espousing community capacity development can enhance the effectiveness of financial management among saving groups in Alebtong district.

Unique Contribution to Theory, Policy and Practice: It was recommended that the government should increase support for saving groups, specifically targeting financial support, capacity building, and security for finance among the saving groups. Also, there is need for local governments to improve the degree of supervision among saving groups besides community sensitization.