Factors influencing rural savings mobilisation in Tanzania: a case of savings and credit co-operative societies in Dodoma and Morogoro Regions

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University of Dar es Salaam
This study examined the factors influencing rural savings mobilisation in Tanzania with reference to savings and credit co-operative societies in Dodoma and Morogoro regions. The study identified determinants of member’s savings, institutional factors for savings, magnitude of savings and savings motives of members. Questionnaires, focus group discussions and observation helped collect primary data. A total of 609 respondents were subjected for interview. A multi-stage sampling technique helped draw the sample of four districts and 11 SACCOS. Data analysis involved the use of descriptive statistics and focused on the profile of the respondents, institutional factors affecting savings mobilisation, magnitude of savings and motivation for savings. The savings and participation models were specified and analysed using regression approach. The study findings revealed that demographic, social and economic factors significantly influence the saving behaviour of co-operative members. The findings also indicated that the magnitude of savings varied in the two regions depending on the income earned from various economic activities, motivation by SACCOS, especially payment of dividend. Other factors for the variation were the types of savings products and available services, namely savings account, deposits and shares. The findings further indicated that personal attributes such as individual level of monthly income, individual’s age, size of household and major sources of income influenced participation of members in SACCOS. The findings disclosed institutional factors such as governance, financial and operational policies as determinants of savings mobilisation by SACCOS. Other factors were distance from financial institutions, time to process membership and minimum balance requirement. With regard to factors influencing the choice of SACCOS for financial savings, the findings highlighted security of savings, membership status and ability to qualify for SACCOS membership. Generally, the findings demonstrate the important role of SACCOS in savings mobilisation. They have provided savers who are not accommodated by the banking system with an alternative mode of saving that fits well with their financial capacity. Access to SACCOS is therefore one of the major factors for mobilisation of savings in rural areas of Tanzania. Thus, it can be concluded that the presence of and membership of SACCOS helps in mobilizing the rural financial saving in the economy’s financial system and efforts should be made to further enhance the participation of the rural households in SACCOS. Generally, decision and policy makers in private and government institutions concerned with rural finance and development need to consider the effects of the above factors when making decisions concerning saving products suitable for rural areas of Tanzania.
Available in print form, East Africana Collection, Dr. Wilbert Chagula Library, Class mark (THS EAF HG2051.T34L53)
Rural credit, Agricultural credit, Saving and investment, Dododma region, Morogoro region, Tanzania
Liheta, B.S.A (2017) Factors influencing rural savings mobilisation in Tanzania: a case of savings and credit co-operative societies in Dodoma and Morogoro Regions. Doctorol dissertation, University of Dar es Salaam. Dar es Salaam.