Review on the Role of rural Saving and Credit Cooperatives in Improving Rural Farmers‘ Socio-economic Activities in Ethiopia


  • Abel Feleke



Credit Cooperatives, Rural Saving, financial solution, low-income, Ethiopia, rural farmers


Rural Saving and Credit Cooperatives (RuSACCOs) are the main financial solution of the people who have low income level.Rural saving and credit cooperatives are considered to have immense potential in financing short term loans for agricultural production technologies and undertake off-farm income generating activities in rural areas where both the state and the private sector have failed. Cooperatives and socio-economic development in Ethiopia has its own Economic significance, Employment creation, income generation and poverty reduction, Social protection, Cooperative representation. Cooperatives have a long history in Ethiopia. Traditional forms of collective action such as iqub found that a traditional form of rotating savings and credit association; work groups such as jige, wonfel, and debo, which help in mobilizing labor resource (Labour sharing); and idir, a traditional association which provides insurance for members during death and other accidents. . Rural saving and credit cooperatives have their own challenges that retard their financial solution to their members and the economical contribution to a country. In Ethiopia, the development of SACCOs is low due to the existence of different challenges. Some of the most important challenges include lack of capacity for providing competent managerial services, limited participation of members in decision making and controlling activities (because of limited capacity and skill), and lack of finance, basic infrastructure, and market information against the need for a better linkage of cooperative members. And recommending Government cooperative agency offices, Unions, and NGOs should provide sustainable technical training for cooperatives technical staffs on financial planning, financial management, and inventory handling issues are the possible recommendations. Saving and credit cooperatives play a crucial role in economic and social development for rural farmers in Ethiopia.


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DOI: 10.55014/pij.v1i3.59
Published: 2018-09-30

How to Cite

Abel Feleke. (2018). Review on the Role of rural Saving and Credit Cooperatives in Improving Rural Farmers‘ Socio-economic Activities in Ethiopia. Pacific International Journal, 1(3), 116–128.