How should rural financial cooperatives be best organized? Evidence from Ethiopia

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dc.creatorAbay, Kibrom A.
dc.creatorKoru, Bethlehem
dc.creatorAbate, Gashaw T.
dc.creatorBerhane, Guush
dc.date2019-03
dc.date2024-06-21T09:11:35Z
dc.date2024-06-21T09:11:35Z
dc.date.accessioned2026-06-27T15:41:40Z
dc.descriptionWhat is the optimal size and composition of Rural Financial Cooperatives (RFCs)? With this broad question in mind, we characterize alternative formation of RFCs and their implications in improving rural households’ access to financial services, including savings, credit and insurance services. We find that some features of RFCs have varying implications for delivering various financial services (savings, credit and insurance). We find that the size of RFCs exhibits nonlinear relationship with the various financial services RFCs provide. We also show that compositional heterogeneity among members (including diversity in wealth) is associated with higher access to credit services, while this has little implication on households’ savings behavior. Similarly, social cohesion among members is strongly associated with higher access to financial services. These empirical descriptions suggest that the optimal size and composition of RFCs may vary across the domains of financial services they are designed to facilitate. These pieces of evidence provide some suggestive insights on how to ensure financial inclusion among smallholders, a pressing agenda and priority of policy makers in developing countries, including Ethiopia. The results also provide some insights into rural microfinance operations which are striving to satisfy members’ demand for financial services.
dc.identifierhttps://hdl.handle.net/10568/147147
dc.identifier.urihttp://hdl.handle.net/123456789/111945
dc.languageen
dc.publisherWiley
dc.relationhttps://hdl.handle.net/10568/147768
dc.relationhttps://hdl.handle.net/10568/148342
dc.rightsOpen Access
dc.sourceAbay, Kibrom A.; Koru, Bethlehem; Abate, Gashaw T.; and Berhane, Guush. 2019. How should rural financial cooperatives be best organized? Evidence from Ethiopia. Annals of Public and Cooperative Economics 90(1): 187-215. https://doi.org/10.1111/apce.12212
dc.subjectmicrofinance
dc.subjectrural economics
dc.subjecteconomic development
dc.subjectcooperative credit
dc.subjectrural finance
dc.subjectcooperatives
dc.subjectcooperative banks
dc.subjectsavings
dc.subjectfinance
dc.titleHow should rural financial cooperatives be best organized? Evidence from Ethiopia
dc.typeJournal Article

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Instituto Internacional de Investigación sobre Políticas Alimentarias (IFPRI)