Effects of financial resource mobilization by Ainabkoi rural Sacco In Ainabkoi Division Uasin Gishu County

Abstract

Financial resource mobilization is one aspect of an economy that must not be ignored. This is even more eminent when it is the economy of the rural small scale farmers. The study set out to investigate whether Ainabkoi Rural Savings and Credit Co-operative Society Ltd has had an effect on the resource mobilization of small scale dairy farmers in Ainabkoi Division Uasin Gishu County. Saving is a key component in any development endeavour as it is believed to be the surest way of increasing income and boosting productivity and investments in an attempt to break the vicious cycle of poverty. The study is of four objectives namely: to determine the effects of personal savings of small scale dairy farmers on financial resource mobilization by Ainabkoi Rural Savings and Credit Co-operative, to find out the effects of the default rates of small scale dairy farmers on financial resource mobilization by Ainabkoi Rural Savings and Credit Co-operative, to assess the effects of guarantors of small scale dairy farmers on the financial resource mobilization by Ainabkoi Rural Savings and Credit Co-operative, to evaluate the effects of membership of small scale dairy farmer on financial resource mobilization by Ainabkoi Rural Savings and Credit Cooperative and propose policy recommendations for funds mobilization and lending requirements in the context of Rural Savings and Credit Co-operatives. Previous studies have alluded that small scale farming is suppose to be the most profitable kind of farming and is expected that most small scale farmers are suppose to grow to large scale farmers. This has only existed in theory. The study employed a case study research design which is descriptive. To achieve these set objectives, the study used a sample of 132 members and 18 Savings and Credit Co-operative staff randomly selected. Data was collected by use of questionnaire instrument and interviews schedules and observation which were computed and analyzed using Pearson Chisquare tests and linear regression model in SPSS to test relationship and effects of the variables on Ainabkoi Rural Sacco activities and the resource mobilization. The findings were presented by use of frequency tables where percentages and means were used to analyze the data. The study summarized that, the duration one has stayed is key in providing loans, that default rates affects the membership of the Savings and Credit Co-operative, and the amount you have saved determines the loan you can get, that guarantorship is the only currently accepted mode of collateral accepted by the Savings and Credit Co-operative. The study also concluded that the guarantors of the loanees must be members of the Savings and Credit Co-operative. This study has recommended that the Savings and Credit Co-operative should model it services in order to accommodate different forms of membership to include business men women groups and youth groups so as to attract government funded programmes to assist in mobilization of resources.