The Role of Voluntary Financial Saving Groups in Promoting Rural Entrepreneurship: Evidence from Kilolo and Iringa Districts

Abstract

The research investigates the role of Voluntary Financial Saving Groups (VFSGs) in promoting rural entrepreneurship with evidence from Kilolo and Iringa districts in the Iringa region. Specifically, it examines three objectives (i) to determine the effect of VFSG practices on rural enterprise growth, (ii) to establish the relationship between the entrepreneurial culture of members of VFSGs and rural enterprise growth, and (iii) to examine the influence of entrepreneurship education on rural enterprise growth. Adoption of a cross-sectional design was considered applicable whereas a mixed research approach comprising quantitative and qualitative data was adopted as well. Proportionately from strata of Kilolo and Iringa districts, a sample of 262 members of VFSGs was drawn. Quantitative data were collected using a semi-structured questionnaire, whereas qualitative data were collected using focus group discussions and in-depth interviews. Content analysis was considered useful for qualitative data, while descriptive statistics and logit model were performed in the quantitative data analysis. The research results discovered that VFSG practices were statistically significant but negative (p=0.000) in influencing enterprise growth. Similarly, entrepreneurship education was statistically significant but negative (p=0.002) in influencing enterprise growth. Further, entrepreneurial culture was significantly positive (p=0.0050 in influencing enterprise growth. Likewise, entrepreneurial behaviour was significantly positive (p=0.001) in influencing enterprise growth. The study recommends that Kilolo and Iringa District Councils, through trade and cooperative officers as well as other development stakeholders like the Institute of Rural Development (IRDP), collaboratively design relevant training programmes in numerous areas such as proper VFSG practices, entrepreneurship, business and investment skills as empowerment strategies for VFSG members.