Abstract:
In Ethiopia, among other things, the low level of domestic saving, which is reflected in the
large resource gap is one of the fundamental problems hampering production, productivity,
and income of the people. Since impact of institutional saving is very limited, the majority of
rural poor households are forced to search financial services through informal channels and
holding in-kind savings as their alternatives. Amhara Credit and Saving Institution (ACSI) is
one of the largest microfinance institutions operating in Ethiopia established in accordance
with the issuing proclamation No.40/1996 (the microfinance law). Its microfinance market is
the low-income population of Ethiopia, particularly of the Amhara Region. The study sought
to examine the impact of microfinance (ACSI) on household saving in meket district. A multistage
sampling
procedure
was
developed
to
select
3 sample kebeles and 372 sampled rural
households. A structured and semi-structured questionnaire was developed to collect
quantitative and qualitative data from sampled households’. In addition; econometric model,
for instance, logit and PSM model were used for analyzing the data collected. It was observed
that there was a change of amount of cash savings, year number of years of saving and in
income earned from off& none farm income-generating activities (IGA) respectively. that
participation in ACSI MFI household saving mobilization has a positive impact on the
amount of cash saving, saving habit and income earned from off & nonfarm IGAS but in kind
saving aspects of household in terms of their livestock asset has been affected negatively in
the study area. Because low interest rate (7%) charged were gained for their deposit cashes
and forced saving principles of ACSI decreased to save participants in kind and (time value of
money) the current market value of money hinders participants to save in kind (inflated to
purchase livestock assets after accumulation of savings) their means of saving embedded with
amounts of cash other than saving in kind were affected the participant households in asset
creation and stabilization.
