An Assessment of the Contribution of Vsla to Poverty Reduction in Masaba Sub-County Busia District

Abstract 

Delivery of appropriate financial services is one of those public services that have come under immense pressures to effectively respond to the challenges posed by recent trends in the global poverty. This study investigated the contribution of VSLA to poverty reduction in Masaba sub-county Busia district. Systems in improving access of affordable financial services to the poor with a focus to community owned micro-finance. It was intended to establish how the VSLA interventions have changed the living conditions of people in Masaba Sub-county, assess the appropriateness, sustainability and replicability of the VSLA model in Masaba sub-county in relation to financial inclusion of the poor and to enhance poverty reduction. Using qualitative methods such as interviews, focus group discussions, review of existing literature, and observations and likert questionnaire which was administered among VSLA members, numerical values of some of the issues was got. Data was collected from 30 VSLA groups and control group for comparison purposes; this helped to qualify whether the current economic status of households is a result of VSLA. The study findings indicate (83%) of the respondents had increased their income, (73%) had increased their savings while 24% had diversified their income sources. Also 64% of the respondents agreed that they had started new businesses due to participation in VSLA, 46% had increased their business capital while 71% agreed that they had acquired more personal property. The study recommends that the implementers of VSLA Methodology should address the challenge of loan repayment and utilization within the context of micro-finance management to ensure that people do not loose property and minimize conflicts that might occur. Again engagement men to participate in VSLA5 is crucial, so men can directly draw from the benefits of VSLA, increase family stability and enable both men and women contribute to the local economy

TABLE OF CONTENTS

Chapter Page

PreHm~nary pages

Declaration

Approval sheet ii

Dedication iii

Acknowledgement iv

List of Acronyms v

Abstract Vi

List of Tables vii

List of Figures vii

ONE THE PROBLEM AND ITS SCOPE 1

Background of the Study 1

Statement of the problem 3

Purpose of the Study 4

Objectives of the study 4

Research Questions 4

Hypothesis 4

Scope of the study 5

The significance of the study 5

Definition of key Concepts 7

TWO REVIEW OF RELATRD LITERATURE 9

Concepts, Opinions and Ideas from Authors/Experts 9

Theoretical Perspective 9

Related Literature 12

THREE METHODOLOGY 18

Research Design 18

Research Population 18

Selection of the sample 18

Research Instruments 20

Sources of data 21

Validity and reliability 21

Data management and Analysis 21

Limitation of the Study 22

FOUR PRESENTATION, ANALYSIS AND INTERPRETATION OF RESULTS 23

Social demographic characteristics of respondents and study participants 23

Household Incomes 25

Impacts on Investments 29

Asset Ownership 33

Impact on Household welfare 38

Continuity, Sustainability and Replicability of VSLA 51

FIVE FINDINGS, CONCLUSIONS AND RECOMMENDATIONS 53

Summary of Findings 53

Conclusions 62

Recommendations 62

References 64

Appendices 65

Appendix I: Schedule of activities 65

Appendix II: Research Project Budget 66

Appendix 111: Questionnaire for VSLA participants 67

Appendix V: Focus Group Discussion Questionnaire: 80

Appendix VI: Proposed data presentation 87