Savings and Credit Cooperatives as Development Actors in the Rural Communities of Ethiopia

Rural Savings and Credit Cooperatives (RuSACCOs) are member-owned financial cooperatives that practice institutionally trusted models to provide financial services to rural households, especially in developing countries. Jabi savings and credit cooperative union is one of the RuSACCO unions in Ethiopia, established in 2005. and located in Amhara National Regional State, West Gojjam Zone, Jabitehnan District.

Savings and Credit Cooperatives as Development Actors in the Rural Communities of Ethiopia

The union is founded with members of 25 primary cooperatives having 14,773 farmers (of which 1,386 women) and initial capital of 85,000 ETB (2,252.07 USD) operating at one District as a working area. The key objective of the union is to provide financial service, improve the social and economic situations, provide technical support, counseling and training services, increase profitability and improve the financial recording system of members and member cooperatives.

Increase the professional capacity of the union

Since 2018, through the financial support of Act Church of Sweden, ICCO Cooperation has been supporting RuSACCO unions in the region, to increase the professional capacity and strengthen the institutional development of unions. Based on the gap assessment made, ICCO organized different training to build the professional capacity, such as governance at the board and staff level, portfolio management, solidarity group lending, gender, and basic business skill training. 

Mr. Yalemzewd Mulugeta, general manager of the union, said that previously the unions had slow growth and service delivery to clients. They also showed a lack of awareness on women membership and leadership roles, poor savings mobilization techniques and strategies, bad credit follow-up system, and absence of staff incentives. The board members did not have a sense of ownership and considered their task as an adjacent work, and the government follow-up and support was generally poor.

Photo: Mr. Yalemzewd Mulugeta, general manager of Jabi savings and credit cooperative union

In the past two years, the union recorded remarkable achievements. Some of these accomplishments are:

  • Four new branches opened in six adjacent District that helped them to reach more clients with high savings mobilization
  • Member primary cooperatives reached 207 in number
  • Individual members increased to 128,359 (28,122 women)
  • Women participation at the board level reached to 29%
  • Savings mobilization, from members and non-members, reached 163,580,719.78 ETB (4,334,070.00 USD)
  • Gender awareness creation training was given
  • Governance of the union improved
  • Staff motivation included in the by-law as a reward of 1% from the annual net profit that the union makes 
  • The monitoring system improved significantly

As a result of all these interventions, the RuSACCOs’s client satisfaction and technical support improved, and at the same time staff members’ motivation was increased. The new staff structure was approved and board members built a sense of ownership. More savings were mobilized, loanable funds and profitability increased, women participation and awareness on gender were enhanced,  the interest rate for savings and credit was adjusted and a credit follow-up system was arranged on a monthly basis. 

The economic benefit has also increased, for instance, previously the maximum dividend paid to members was 13,000.00 ETB (344.44 USD) based on paid capital and the amount of savings, now it reached 112,000.00 ETB (2,976.44 USD). Generally, the institutional capacity improved, and up to now, there is no delinquency recorded. As the demand for loans has been increasing, the union needs additional commercial sources of credit to satisfy all the needs. 

The impact of the Coronavirus outbreak has been unavoidable, as it forced some businesses to close and some clients withdrew savings, delayed repayments, and reduced savings.

To ensure safe and efficient day to day operations, ICCO supported desktop computers, banknote counting machines, and COVID-19 prevention sanitary materials to minimize the physical contact of paper money.

Photo: Ms. Tigest Alemkere, cashier at Jabi RuSACCO Union, with a banknote counting machine


As of 1st January 2021 ICCO has joined forces with Cordaid and continues as one organization under the name Cordaid.

ICCO’s international website will remain online for the time being and can be visited here or go to Cordaid: