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In Partial Fulfillment of the Requirments for the Degree of the Master of Science in Agricultural Economics

Year: 2025
Type: article
Abstract: Village saving and loan association is one of the early established informal microfinance institutions which established by CARE Ethiopia and It involved in Sidaama region during 10 years, by providing saving and credit programs to the poor rural households and empower them by strengthening their Economic role and increase their ability in the society. This study was concerned with the main aim of identifying and analyzing the impact of VSLA on selected rural household’s income in study area. 338 sampled households were randomly selected from four rural kebeles of the district. 63 members were selected from those four kebele of VSLA members whereas 275 households’ were non-members and their information were collected using primary data, as well as secondary data were collected from review of different related literatures. Descriptive statistics and Logit regression analysis was used to identify the variable which influences rural household’s decision-making in VSLA membership and the result revealed that, from the total of twelve explanatory variables included in the model seven of them were negatively and positively affecting households’ decision on probability to join VSLA program at 1%, 5% and 10% significance level. As well, the marginal effects were also estimated to evaluate the contribution of each of these factors to the likelihood of participant in VSLA program. Structured questionnaire and interview schedule were used to elicit information from the respondents. By Using household’s annual income, and Monthly cash saving amount of the respondent’s indicator variables, the study measured the impact of VSLA membership on the income of rural households by implementing propensity score matching (PSM) to compare average difference between members of VSLA and non-members. The matching result of Average Treatment Effect on Treated (ATT) reveals that participation in VSLA has positive and significant impact on both outcome indicator variables. The study concludes that VSLA has significant impact on the rural household’s income in the study area. Therefore, need to consideration to the determinate of mobilization and support VSLAs program to increase the well-being of rural households.
DOI: 10.20372/nadre:12690
Author: MIHRET TADESSE
Language: English
Open Access status: green
OpenAlex ID: W6944510690
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