The Impact of Rural Saving and Credit Cooperative on Household Saving: The Case of Ginir District, Oromia, Ethiopia

Abstract This study was carried out to determine the impact of rural credit and saving cooperatives on household saving. Data was collected from primary source using questionnaire method. To select sample respondents multi-stage sampling technique were followed. First Ginir district was purposefully selected. Then after, a simple random sampling technique was employed to select three kebales from the district. Finally, using systematic random sampling technique 295 sample household were selected. Logit, and Propensity Score matching methods were employed for data analysis. The results of the logit regression model identified that family size and distances from RUSACCO office, sex of the household head, marital status of household head, education level, access to training, access to credit and amount of loan borrowed affect households’ membership in RUSACCOs. Propensity score matching (PSM) method was also employed to determine the impacts of membership in RUSACCO on household saving in the study area. The estimation result presented that, on average, membership of households in RUSACCO have increased amount of saving by 2627.9 birr during the survey year. The estimated average treatment effect (ATT) showed that membership of households in RUSACCO has significant impact on saving of member households with significant t-statistic (6.18) at 1 percent significance level. The average amount of saving of members households was higher by 37.4 percent when compared with the average amount of saving of non-member households in the study area during survey year.