The Impact of Rural Saving and Credit Cooperative on Multidimensional Poverty Status: Evidence from Rular Households in Awabel District, Amhara Region, Ethiopia

Abstract

Multidimensional poverty is the problem of every country in the world; hence, it needs the attention of policy makers and various development actors like cooperatives. The main purpose of this study is to investigate the impact of saving and credit cooperative financial service on multidimensional poverty status of rural household in Awabel district. The specific objectives of the study is to examine the impact of saving and credit cooperative financial service on multidimensional poverty status of rural households, to identify determinants of multidimensional poverty status of rural households, to identify the dimension of household poverty affected by saving and credit cooperatives financial services. The study adopts a cross sectional, and quantitative research design. The target population was 4,675 actively registered RuSACCO members’ households. The sample size was a total of 380 i.e190 members as a treated group and 190 nonmembers as counterfactual obtained through multi-stage sampling techniques .The data is primary data collected through household survey.For data analysis firstly, binary logit models is used to identify the determinants of multidimensional poverty status of rural households; and the finding revealed multidimensional poverty status of rural household has negative relationship between RuSACCO membership status (-4.2%), size of cultivated landholdings (-5%), access for agricultural extension service (-4.01%), and access for road (-1.7%) and are all statistically significant at 1% level. Moreover, there was a negative relationship between experience of household head on agricultural activity (-0.15%) and statistically significant at 5% level, the risen in educational status of household head from illiterate to literate, primary to secondary and from secondary to higher education goes dawn multidimensional poverty status by-1.8%, -3% and -4.3% and all are statistically significance at 1% level It is also found that, there were positive relationship between, multidimensional poverty status of rural households and dependency ratio (0.11%) at 5% level of significance) in Awabel district. Secondly ,propensity score match model is applied to examine the impact of RuSACCO financial service on multidimensional poverty status of rural households, and the finding revealed that, financial service of RuSACCO had reduce the multidimensional poverty index of rural household by 0.082898018 on average for members .The findings also showed that the RuSACCOs financial service has reduced health dimension of poverty by 0.036242775, the educational dimension of poverty by 0.018915905standard of living dimension of poverty by 0.0152, on average for RuSACCO members compare to that of non members. It is recommended the government should give special attention for organization and promotion of cooperative. Cooperative extension workers should advice members of RuSACCO to spend their financial service on health, education and standard of livings respectively. Increase productivity per size of cultivated landholding, work hard to bring literate farmers, work against reducing young age dependency, rising road accessibility, increase the accessibility of agricultural extension workers, and experience sharing among farmers to reduce the multidimensional status of rural household’s members in Awabe district.

Keywords: RuSACCOs financial service, Multidimensional poverty, Awabel district in Amahara region, propensity score matching model.

DOI: 10.7176/DCS/9-9-02

Publication date:September 30^th 2019