The Transformative Role of Iddir and Iqub in Social Protection, Community Cohesion, and Development in Ethiopia: Woldia City in Focus

This paper explores the essential, changing functions of Ethiopia’s traditional institutions, Iddir and Iqub, in filling important voids in official social protection and financial systems. Iddir, initially established as funeral organizations, and Iqub, a variant of rotating savings and credit groups, have demonstrated adaptability as culturally rooted systems for fostering social capital, improving resilience, and encouraging local development. Utilizing a comprehensive desk-based analysis of academic articles, case studies, and theoretical frameworks—such as institutional economics, social capital theory, and development anthropology—the study consolidates current knowledge to illustrate how these institutions serve as essential complements to state and market systems. Iddir serves as an essential informal social insurance system, gathering resources to provide emergency assistance and funeral support, thus alleviating financial insecurity. Simultaneously, Iqub enables financial opportunities and business engagement, especially for women and low-income groups frequently marginalized by traditional banking. The research emphasizes that both organizations enhance bonding social capital (trust within groups) and bridging social capital (cooperation between groups), which are vital for collective action and community resilience. Their achievement depends on trust, mutual benefit, and low levels of bureaucracy. Nonetheless, the analysis also reveals shortcomings, including exclusivity, informality, and gender inequalities in leadership and advantages. In summary, this study contends that Iddir and Iqub are not simply remnants of history but active, vital participants in the developmental framework of Ethiopia. The research supports policy frameworks that officially acknowledge and purposefully incorporate these indigenous entities into national social protection and development strategies, fostering a more inclusive, effective, and culturally attuned method for sustainable development.