The Impact of Households Participation in Informal Saving towards Poverty Reduction: Case Study of Saving Internal Leading Communities within the Household Level in Naivasha Sub County, Kenya

Abstract

Savings internal leading communities (SILC) are groups formed by community members who are known to each other. They are user-owned and managed with no external interference, with the aim of creating sustainability, accessibility of the loans, transparency and flexibility in the group activities. SILC group members are given loans with small interests and the interest gained throughout the cycle is shared among members at the end of each cycle. The aim of the study to examine the impact of households' participation in informal saving towards poverty reduction within the household level in Naivasha sub county Nakuru, Kenya. The study revealed that savings internal lending communities have enabled members to save their money borrow and invest the amount in different ways such as poultry and start of small businesses. SILC has proved to be a mechanism to prosperity through training of caregivers in agriculture, business management and record keeping apart from training. Members have a social fund which caters for emergency need thus reduce anxiety and avoid usage of the saved amount for development. The study concludes that the Participation in saving internal lending communities had a significant influence on poverty reduction at households within Naivasha Sub County. The study recommends that there is a need for further research to establish the influence of Savings internal lending communities in education in Naivasha sub county Nakuru.