Determinants of households’ membership in rural savings and credit cooperatives: An analysis of South Achefer district in Northwest Ethiopia

Micro-level rural saving and credit cooperatives in Ethiopia's South Achefer District, Western Amhara region, have not received much attention. Therefore, the purpose of this study was to examine the variables that affect the likelihood of rural households in the South Achefer District participating in saving and credit cooperatives. Three Kebeles and 194 households were selected using simple random sample procedures and stratified sampling. Data were collected using focus group discussions, key informant interviews, and surveys. The collected data was analysed using descriptive and inferential statistics. The socioeconomic, demographic and other relevant aspects impacting participation in these cooperatives were examined using a probit regression model. Sex, age, income, land size, tropical livestock unit, household distance from rural saving and credit cooperative, and household participation in local leadership all had a significant impact on savings and credit cooperative membership. This research finds that joining rural saving and credit cooperatives will gradually spread from RUSACCO members to non-members. Therefore, it can be concluded that the Cooperative Promotion Agency in Ethiopia can start introducing cooperative membership from households that have the household demographic, socioeconomic, and other characteristics of households that are more likely to be cooperative members. It is suggested that the Cooperative Promotion Agency in Ethiopia should start by focusing on and giving priority to households with the following household characteristics: women, young people, higher income levels, higher TLU, households that are involved with other financial institutions, households that have better participation in local leadership, and households that are close to RUSACCO.