Saving and Borrowing in Rural Uganda
This paper explores the reasons underlying the persistence of poverty in rural Uganda and investigates aspects of saving and borrowing behaviour in households, drawing on the results of a survey carried out in 1997.
Sub Saharan Africa has languished in recent decades - a period in which countries elsewhere in the world (especially in East and Southeast Asia) have made substantial progress in terms of economic and human development. It is widely recognised that high levels of savings, together with investment in physical and human capital, have been among a number of key factors that have led to such success.
Uganda is an economy in sub-Saharan Africa that has shown some promise of success in the 1990s. It has enjoyed macroeconomic stability and a rapid rate of economic growth. However, in some other respects, the country retains features that give cause for concern for future development. Poverty in the rural areas remains widespread, and the domestic savings rate is amongst the lowest in the world.
Paper further examines the potential role of microcredit arrangements in alleviating poverty (and in generating a flow of savings), and the conditions that may favour success in the operation of microcredit schemes are evaluated.
Article concludes that access to financial markets may be especially important, if people are to be a able to use saving and borrowing behaviour in order to generate new income-earning opportunities. But that may not be sufficient as it may also be necessary to alter attitudes and expectations, or provide advice, training and guidance on the ways in which credit might be used to open up new opportunities for individuals and communities.
