The Role of Rural Saving and Credit Cooperatives in Enhancing Financial Inclusion: A Case of Biftu Batu Rural Saving and Credit Cooperative
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Date
2014-05
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Addis Ababa University
Abstract
Ethiopia has a very low rural banking density and a lowest financial inclusion standing
as mainstream financial institutions are heavily tilted towards the urban centers with
good physical infrastructure, and leaving the rural areas underserved. On the other
hand, with local ownership and control, RuSACCOs are considered as an ideal model
for enhancing financial inclusion, and can help financially excluded segments who are
often perceived as too risky by commercial banks and MFIs. Yet, the role of rural
financial cooperatives as financial inclusion model haven’t been well thought by the
regulatory institutions and other actors. With these premises, the study have explored
the role of rural-based saving and credit cooperative society in improving financial
inclusion. Data required for the study were collected from both primary and secondary
sources. It was conducted on a single selected RuSACCO in Adami Tullu Jiddo
Kombolcha district in Oromia region of Ethiopia. The cooperative society has generated
an opportunity for the excluded poor segments through creating financial access,
delivering micro-credit, promoting savings, and financial literacy. This is of utmost
importance in order to upgrade RuSACCOs as a key actors in financial inclusion. The
study calls for an improved enabling environment for pro-poor actors like financial
cooperatives (RuSACCOs) to improve financial inclusion.
Keywords: Cooperative, Financial Inclusion, Financial Exclusion, Financial
Services, RuSACCO
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Keywords
Cooperative, Financial inclusion, Financial exclusion, Financial services, RuSACCO