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Saving and borrowing in rural Uganda

By Polycarp Musinguzi and Peter Smith


Sub-Saharan Africa has languished in recent decades - a period in which countries elsewhere in the world (especially in East and Southeast Asia) have made substantial progress in terms of economic and human development. It is widely recognised that high levels of savings, together with investment in physical and human capital, have been among a number of key factors that have led to such success. Uganda is an economy in sub-Saharan Africa that has shown some promise of success in the 1990s. It has enjoyed macroeconomic stability and a rapid rate of economic growth. However, in some other respects, the country retains features that give cause for concern for future development. Poverty in the rural areas remains widespread, and the domestic savings rate is amongst the lowest in the world. <br/><br/>Drawing on the results of a survey carried out in 1997, this paper explores the reasons underlying the persistence of poverty in rural Uganda, and investigates aspects of saving and borrowing behaviour in households. The potential role of microcredit arrangements in alleviating poverty (and in generating a flow of savings) is examined, and the conditions that may favour success in the operation of microcredit schemes are evaluated

Topics: HC, DT
Publisher: University of Southampton
Year: 2000
OAI identifier:
Provided by: e-Prints Soton
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