Socio-demographic factors influencing household participation in Village Savings and Loans Associations (VSLA) and the likelihood of food security among VSLA and non- VSLA households.

Abstract

This study examined the socio-demographic factors influencing households’ participation in village savings and loans associations (VSLAs) and the likelihood of food security among VSLA and non-VSLA households using a binary logit regression.

The findings revealed that the probability of a household participating in a VSLA increases by 21.43% when a household is headed by a female, 9.45% when monthly income increases by Ugx. 100,000/= and 40% when the household has access to credit. The age, years spent in school and marital status of the household head all had statistically insignificant positive effects on the probability of a household participating in a VSLA (All p- values >5%) while household size had a statistically insignificant negative effect on a household’s decision to participate in a VSLA (p- value >5%).

The probability of a household being food secure increases by 35% when monthly savings increase by Ugx. 100,000/= while participation in VSLA, access to improved seed use and access to credit increase the probability of a household being food secure by 16.64%, 22.28% and 13.80%, respectively. The age, years spent in school and marital status of the household head, and access to agricultural extension services by the household all had statistically insignificant positive effects on the probability of a household being food secure (All p-values >5%).

Based on the findings, the study recommends sensitization campaigns on the benefits of VSLAs and scaling up of VSLA interventions by relevant government institutions and development partners. The study also recommends integration of VSLA activities into agricultural activities by government and development partners, provision of cheap agricultural credit by both formal and informal financial institutions and use of improved agricultural inputs by farmers.