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Essays on the Performance of Savings Groups

Linda Nakato of the School of Business and Law at the University of Agder has submitted her thesis entitled «Essays on the performance of savings groups» and will defend the thesis for the PhD-degree Monday 30 August 2021. (Photo: Private)

Taken together the findings from this research have important policy implications for governments and development organizations interested in using savings groups to tackle multi-dimensional poverty in a cost-effective way.

Linda Nakato

PhD Candidate

Linda Nakato of the School of Business and Law at the University of Agder has submitted her thesis entitled «Essays on the performance of savings groups» and will defend the thesis for the PhD-degree Monday 30 August 2021. 

She has followed  the PhD-programme at theSchool of Business and Law at the University of Agder.

The doctoral work is funded by a grant from Annikka Berridge on behalf of the FAHU Foundation in Denmark.

Summary of the thesis by Linda Nakato:

Essays on the Performance of Savings Groups

In this dissertation, I have researched on how interventions, both internal and external, influence the performance savings groups.

Savings groups are informal grassroots financial associations where self-selected members pool money into a common pool and borrow from the pool at an interest. In other words, individuals form groups, consolidate their own funds from which interested members can take a loan at a pre-determined interest.

Below is a summary of the three research papers that form this dissertation:

Pro and con financial institutions

The first study looks at how the performance of these savings groups is influenced when they develop relationships with formal financial institutions in the form of opening a joint savings account or taking a loan as a group.

The results show that having a savings account with a formal financial institution significantly enhances the performance of groups, as evidenced by the increase in savings per member and the return on savings, while having a loan from a formal financial institution to a large extent, has a negative effect on the performance of savings groups.

Financial education

The second study exploits the uniqueness of savings groups to address the question of whether financial education affects the financial behavior of the group members.

The findings show that financial education is consistently associated with higher savings per member, a higher fund utilization rate, and a higher return on savings.

Thus, the findings suggest that, indeed, savings groups provide a viable channel through which financial education can be offered.

Gender

The third study delves into the composition of the group in terms of gender and how this influences the group’s profit-generating capacity.

The results suggest that male membership negatively impacts the profit-generating capacity of savings groups. Moreover, gender inequality in a country strengthens the observed relationship.

These findings highlight the need to thoroughly appraise gender-based interventions aimed at the savings groups to avoid harming some aspects of their core operational model.

Further, they also show that contextual factors should be accounted for before rolling out interventions.

Findings

Taken together the findings from this research have important policy implications for governments and development organizations interested in using savings groups to tackle multi-dimensional poverty in a cost-effective way.

Disputation facts:

The trial lecture and the public defence will take place online, via the Zoom conferencing app (link below)

Vice Dean Bjørn-Tore Flåten, School of Business and Law, UiA, will chair the disputation.

The trial lecture Monday 30 August 2021 at 17:00 hours

Public defence Monday 30 August 2021 at 18:00 hours

Given topic for trial lecture«The role of trust and transparency in financial transactions at the bottom of the pyramid»

Thesis Title«Essays on the performance of savings groups»

Search for the thesis in AURA - Agder University Research Archive, a digital archive of scientific papers, theses and dissertations from the academic staff and students at the University of Agder.

The thesis is available here:

https://hdl.handle.net/11250/2770141

 

The CandidateLinda Nakato (1991, Kamuli district, Uganda) Bachelor’s degree from Makerere University, Kampala, Uganda and Master’s degree from the University of Agder (2016). Master thesis: "The influence of international ownership on the performance of microfinance institutions". Present position: Researcher and teaching assistant at the School of Business & Law at the University of Agder.

Opponents:

First opponent: Professor Mary Kay Gugerty, Evans School of Public policy and Governance at University of Washington, Seattle, USA

Second opponent: Associate Professor Alfredo Burlando, University of Oregon, USA

Professor Lars Oxelheim, University of  Agder, is appointed as the administrator for the assessment commitee.

Supervisors in the doctoral work were Professor Roy Mersland, UiA (main supervisor) and Associate Professor Bert D’Espallier, KU Leuven, Belgium (co-supervisor)

Opponent ex auditorio:

The chair invites members of the public to pose questions ex auditorio in the introduction to the public defense, with deadlines. It is a prerequisite that the opponent has read the thesis. Questions can be submitted to the chair Bjørn-Tore Flåten by e-mail bjorn-tore.flaten@uia.no