EconPapers    
Economics at your fingertips  
 

HOW SHOULD RURAL FINANCIAL COOPERATIVES BE BEST ORGANIZED? EVIDENCE FROM ETHIOPIA

Kibrom Abay, Bethelhem Koru, Gashaw Abate and Guush Berhane

Annals of Public and Cooperative Economics, 2019, vol. 90, issue 1, 187-215

Abstract: What is the optimal size and composition of Rural Financial Cooperatives (RFCs)? With this broad question in mind, we characterize alternative formation of RFCs and their implications in improving rural households’ access to financial services, including savings, credit and insurance services. We find that some features of RFCs have varying implications for delivering various financial services (savings, credit and insurance). We find that the size of RFCs exhibits nonlinear relationship with the various financial services RFCs provide. We also show that compositional heterogeneity among members (including diversity in wealth) is associated with higher access to credit services, while this has little implication on households’ savings behavior. Similarly, social cohesion among members is strongly associated with higher access to financial services. These empirical descriptions suggest that the optimal size and composition of RFCs may vary across the domains of financial services they are designed to facilitate. These pieces of evidence provide some suggestive insights on how to ensure financial inclusion among smallholders, a pressing agenda and priority of policy makers in developing countries, including Ethiopia. The results also provide some insights into rural microfinance operations which are striving to satisfy members’ demand for financial services.

Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://doi.org/10.1111/apce.12212

Related works:
Working Paper: How should rural financial cooperatives be best organized? Evidence from Ethiopia (2017) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:annpce:v:90:y:2019:i:1:p:187-215

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1370-4788

Access Statistics for this article

Annals of Public and Cooperative Economics is currently edited by Marco Marini

More articles in Annals of Public and Cooperative Economics from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().

 
Page updated 2021-05-18
Handle: RePEc:bla:annpce:v:90:y:2019:i:1:p:187-215