ASSESSMENT ON THE EFFECT OF VILLAGE SAVING AND LENDING ASSOCIATION ON LIVELIHOOD OF ITS MEMBERS IN GEDEO ZONE

Formal microfinance institutions have been an important tool in the fight against poverty in<br> developing countries, but their reach for rural people and urban slum poor are limited.<br> Following this, Village Savings and Loan Associations (VSLAs) are established as an<br> alternative, informal mechanism for saving and borrowing that do not require external<br> capital or ongoing financial or administrative support from a founding organization or<br> government bodies. Thus, this study aimed to assess the effect of village saving and lending<br> association on livelihood of its members. Using a qualitative research methodology, the study<br> tried to focus on examining the effects of VSLAs contribution to economic and social<br> wellbeing of households, and decision makings, and women participation in community<br> activities. The study used and it works in three Woredas (Dilla, Y/chafe and Kochore) and<br> each have 7 groups and 15 members total 315 members and collected data using<br> questionnaire and focus group discussion. The number of VLSA in EECMY DASSC Project<br> has 21groups with the membership of 315, each groups have 15 members. The type of<br> sampling techniques applied is simple random sampling which was used to select sample<br> VSLA members. Since the members of the VSLA are homogenous in nature, 176 members<br> from the 12 VSLA groups are selected to fill the questionnaires and an institution based<br> descriptive study was applied. The sample of this study incorporates both female and male<br> participants and non-participants of VSLA. It shows that of the respondents were 64.3%<br> female and 35.7% male and 40% female and 60% male respectively. This is testimony to the<br> fact that most beneficiaries from vsla are women. The study enables to see the contribution in<br> terms of income, saving, profit, benefit and social capitals. While assessing the contribution<br> in terms of income, the effects of income sources that are added after beneficiaries join in to<br> vsla and income that generated out of the main business are trying to maximize than non-<br> benefited or non-participants to vsla. The income status result suggested that IGA provided<br> by the institution shows a positive relation in beneficiaries income as it indicates that about<br> 95% clients have improvement in their income. Furthermore, the assessment showed that all<br> beneficiaries have voluntarily saved despite the low and high saving.