The determinants of participation in savings groups and the impact on input investment among smallholder farmers in Sironko district, Uganda

Bukuwa Nambale Emmanuel

Working Papers from African Economic Research Consortium

Abstract: To promote savings groups (SGs), which are important in promoting financial inclusion among smallholders, it is imperative to understand the factors that affect participation in these SGs and the associated impact in the context of Uganda. This study determined the factors influencing participation in SGs. The study put particular emphasis on the use of SGs as a form of fully-fledged financial services provision to access agro-inputs. The study, therefore, additionally, determined the impact of these SGs on the expenditure on agro-inputs. The study used data collected through a cross-sectional survey from 249 participants. These participants were drawn from Sironko district, Uganda, East Africa. The study employed a Probit model to investigate the determinants of participation and intensity of participation. To estimate the impact of SGs on expenditure on agro-inputs, average treatment effects on the treated (ATT) were calculated after discounting the selection bias between the SGs' members and non members. Averagely, SGs incurred 40% of all expenditure on Agro-inputs by SGs' members. SGs' members were significantly higher than non-members as regards total expenditure on agro inputs, per capita expenditure on agro-inputs, and proportion of income spent on agro-inputs. ATT was insignificant and tends to be negative.

Date: 2022-12
Note: African Economic Research Consortium
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