Impact Of Self-help Groups on Poverty Alleviation: A Case Study of Caritas Nairobi Ruaraka Zone

Abstract

The Self-Help Group (SHG) approach help in poverty alleviation at the grass root level as there is economic empowerment whereby members are able to acquire skills to start small businesses, own some assets, acquire skills in risk management and marketing. The purpose of this study was to establish the impact of Caritas Self-Help Programme on poverty alleviation in Ruaraka Zone. The study adopted a descriptive cross-sectional survey methodology, because it cuts across several Self-Help Groups in Ruaraka Zone. The study used questionnaires in order to collect data. The questionnaire had both open and close ended questions. The study population was 4995 members of the Caritas SHG in Ruaraka zone. This study used simple random sampling to sample 357 respondents or 7.1 percent which was established after using the Krejcie and Morgan formula to determine the sample size. Quantitative data collected was coded and analysed using descriptive statistics such as percentages, mean and standard deviation. Measures of central tendency were applied (mean, median, mode and percentages). Pearson’s correlations analysis was conducted at 95% confidence interval and 5% confidence level 2-tailed to determine the relationship between the variables and the poverty alleviation in Ruaraka zone. Tables were used to present the data collected for ease of understanding and analysis. The research findings revealed that members` savings in the SHGs had big impact on poverty alleviation. It was also established that the provision of long-term loans and also unsecured loans based on payment history had a big role in alleviating poverty. The study further established that financial training of the members helped in attempts to alleviate poverty by improving on their financial literacy. It therefore had a positive impact on their financial well-being and individual financial performance. The researcher concluded that member savings as advocated by SHGs had a great bearing on financial well-being of members and consequently affected poverty alleviation to a considerable extent. The provision of loans to members both long term and short term was imperative towards poverty reduction since these loans could be easily accessed by the members. The study concluded that financial training conducted in SHGs was imperative in poverty alleviation since the members were readily enlightened on how to best use what they can reasonably get. Local Authorities at the County level should readily promote SHGs by way of offering better training in terms of financial literacy and financial management. The study recommends that SHGs ought to encourage financial saving and diligent spending of its members. The groups should also provide emergency loans to cater for emergencies that cannot be reasonably expected to happen. Future assessment can be done across different kinds of SHGs in other areas of the country so as to provide research findings that are comparable to the above made deductions. The study suggested that further studies be done to investigate the various factors that are considered by people before joining and forming SHGs.