Cooperative Micro Loans and Individual Standards of Living, A Case Study of Kihondo Sacco Bundibugyo District

TABLE OF CONTENTS

DECLARATION ........................................................................................ . . .... i

APPROVAL ....................................................................................................................................... ii

DEDICATION ................................................................................................................................... iii

ACKNOWLEDGEMENT .................................................................................................................. iv

LIST OF ACRONYMS ....................................................................................................................... v

LIST OF TABLES ............................................................................................................................. vi

LIST OF FIGURES ........................................................................................................................... vii

ABSTRACT ...................................................................................................................................... xiii

CHAPTER ONE ................................................................................................................................. 1

INTRODUCTION ............................................................................................................................... 1

l.0 lmrocluction ................................................................................................................................... 1

l. l Background to the study ................................................................................................................ 1

1.1.1 Historical perspective .................................................................................................................. 1

1.1.2 Theoretical perspective ............................................................................................................... 3

1.1.3 Conceptual perspective ............................................................................................................... 4

1.1.4 Contextual perspective ................................................................................................................ 5

1.2 Problem statement ......................................................................................................................... 7

1.3 Purpose of study ............................................................................................................................ 7

1.4 Research Objectives ....................................................................................................................... 7

1.5 Research Questions ........................................................................................................................ 7

viii

1.6 Scope of the study .......................................................................................................................... 8

1.6.1 Geographical scope ................ •········;··························································································· 8

1.6.2 Content scope ............................................................................................................................. 8

1.6.3 Time scope ................................................................................................................................. 8

1.7 Significance of the study ................................................................................................................ 8

CHAPTER TWO ................................................................................................................................. 9

LITERATURE REVIEW .................................................................................................................... 9

2.0 Introduction ................................................................................................................................... 9

2.1 Theoretical review ................... , ..................................................................................................... 9

2.1.1 Neo-classical growth models ....................................................................................................... 9

2.1.2 Welfarist theory .......................................................................................................................... 9

2.1.3 The institutionist theory .............................................................................................................. 9

2.1.4 Empowerment Theory ............................................................................................................... 10

2.1.5 Uniting theory ........................................................................................................................... 10

2.2 Conceptual Review ...................................................................................................................... 10

2.2. ! Co,weptual Frame work ......................................................................................................... 11

2.3 Review of related literature .......................................................................................................... 12

2.4 Empirical review ......................................................................................................................... 13

2.5 Relationship between credit facility and standard of I iving ........................................................... 15

2.6 Benefits of Accessing Micro Loans .............................................................................................. 18

2.7 Challenges faced by borrowers .................................................................................................... 20

ix

2.8 Conclusion .................................................................................................................................. 21

CHAPTER THREE ........................................................................................................................... 22

RESEARCH METHODOLOGY ....................................................................................................... 22

3.0 Introduction ................................................................................................................................. 22

3.1 Research design ........................................................................................................................... 22

3.2 Study population .......................................................................................................................... 22

3.3 Sampling design .......................................................................................................................... 22

3.4 Sampling procedure ............................................................... : ..................................................... 22

3.5 Sample size .................................................................................................................................. 22

3.6 Source of data .............................................................................................................................. 23

3.6.1 Primary data ............................................................................................................................. 23

3.6.2 Secondary data .......................................................................................................................... 23

3.7 Data collection instrument ........................................................................................................... 23

3.8 Data collection procedure ............................................................................................................ 23

3.9 Ethical consideration .................................................................................................................... 23

3.10 Data analysis and presentation ................................................................................................... 24

3.11 Limitations of the study ............................................................................................................. 24

CHAPTER FOUR ............................................................................................................................. 25

DATA ANALYSIS, INTERPRETATION AND PRESENTATION OF FINDINGS .......................... 25

4.0 Introduction ................................................................................................................................. 25

4.1 Demographic characteristics of the respondents ........................................................................... 25

X

4.1.2 Sex of respondents .................................................................................................................... 26

4.1.3 Marital status of respondents ..................................................................................................... 26

4.1.4 Level of education .................................................................................................................... 27

4.2.1 Accessibility to credit facility .................................................................................................... 28

4.2.3 How many times have you borrowed from HEDA Sacco .......................................................... 29

4.2.4 How did you borrow? ............................................................................................................... 30

4.2.5 Are there collaterals required to access a loan ............................................................................ 31

4.2.6 What collateral did you give to HEDA ...................................................................................... 31

4.2.7 Which loan product did you receive .......................................................................................... 32

4.2.8 Do you know anything about use of the following? ................................................................... 33

4 .3 .0 Benefits of accessing credit faci Ii ty ........................................................................................... 34

4.3.2 Has the loan facility improved your standard of living ............................................................... 35

4.3.3 If yes? How has the credit facility improved your standard of living .......................................... 36

4.3.5 !-low have you managed to pay back the loan facility ................................................................. 37

4.4.0 Challenges encountered by borrowers ....................................................................................... 38

4.4.1 Have you ever encountered any challenge as a result of borrowing from HEDA Sacco .............. 38

4.4.2 If yes, what challenges respondents !)ave encountered as a result of borrowing .......................... 39

4.4.3 What do you think should be the solution should be the solution to the above ............................ 40

CHAPTER FIVE ............................................................................................................................... 42

DISCUSSION, SUMMARY OF FINDINGS, CONCLUSION, RECOMMENDATIONS .................. 42

5.0 INTRODUCTION ....................................................................................................................... 42

xi

5.1. Discussion of findings ................................................................................................................. 42

5. I.I Relationship between accessibility to credit facility and standards of living ............................... 42

5 .1.2 Benefits of accessing credit facility ........................................................................................... 42

5.1.3 Challenges faced by borrowers .................................................................................................. 43

5.2 Summary of findings ................................................................................................................... 44

5.3 Conclusion ................................................................................................................................... 44

5.4 Recommendations ....................................................................................................................... 44

5.5 Areas for further study ................................................................................................................. 45

References ......................................................................................................................................... 46

APPENDICES .................................................................................................................................. 49

APPENDIX I .................................................................................................................................... 49

RESEARCH QUESTIONNAIRE ................................................ : ..................................................... 49

APPENDIX II ............................................................................. : ..................................................... 52

PROPOSED BUDGET ...................................................................................................................... 52

APPENDIX III .................................................................................................................................. 53

TIME FRAME ................................................................................................................................. 53

APPENDIX IV ................................................................................................................................. 54

INTRODUCTORY LETTER FROM THE UNIVERSITY ................................................................ 54