ABSTRACT

The study was carried out in lkwuano local government area of Abia State. The principal objective is to evaluate the performance of traditional savings groups with respect to savings mobilization and credit delivery. Primary and secondary sources of data were used. To make data collection easy, thirty four (34) traditional savings organizations comprising men (14), youth (8), women (6), Adult male and female (4), youth and Adult male (2) organizations. Two respondents from each of the groups were selected for the study. This gave a total of 68 respondents. The simple random method of selection was used in each case. Two sets of questionnaires were used for data collection, one set for the activities of the organizations and the other for members of the organizations. Data analysis was done using descriptive and inferential statistics namely, the mean, frequency distribution, percentages and regression analysis. The result shows that the average age of the organization is 13 years, in tenns of membership strength, men savings organization have greater percentage of membership than other groups. The level of linkage with formal financial institutions is generally poor among the saving groups. Members benefit from the organizations include interest earned from savings, profit from financial transaction and functions of the group centered mainly on the welfare of their members. The study further shows that in addition to mobilization of savings and granting of loan to members, all the groups provided social and economic assistance to non-members and participated in community development. The organization sustained their operations by contributing variable and fixed amount on monthly and weekly basis as well as from levies, annual dues and aggressive method of loan recovery. The lending terms and conditions varied among the organizations ranging from interest rate, value of acceptable collateral and amount disbursed. The most important motives for savings as indicated by the respondents are security of savings and savings for children's education. In comparative terms, youth savings organizations mobilize more savings while men savings organization grant more loans to members than the other organizations the result obtain from the regression analysis shows that the level of linkage with formal financial institutions, value of loan issued, income generated and profit shared are the major factors that affects savings mobilization as indicative from their different levels of significant. The R2 value is 44.9% and F-ratio was significant at 10%. Based on the findings, the recommendation is that these organizations should be used as an intermediary for loan disbursement and recovery from formal financial institutions so as to increase their financial base and services.