In recent years economists international organizations and governments in

In recent years economists international

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In recent years, economists, international organizations, and governments in developing countries haveplaced increasing emphasis on the mobilization of deposits, not only to increase domestic savings toachieve sustained economic growth and development, but also to strengthen domestic financialintermediaries (Admass and Vogel, 1986; Besley, 1995).Germany was the first country in the world to apply the principle of cooperation in the field of saving andcredit. The cooperative saving and credit movement was started in Germany in the middle of the 19thcentury. At that time, the economic condition of German was extremely deplorable and the peasants andartisans felt crushed under the heavy weight of indebtedness. Jews rule over the market and the poorlaborers and farmers had no way out to buy articles of their requirement from them and sell their productto them. Hence, German laborers and peasants were passing such bad time. Raiffeisen tries to reduce thesuffering of the people who are living in rural areas while Schulze adopted the new measures for givingrelief to the people in the urban areas (John, 1986).
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SACCOs are promoted not only for money; they contribute to the promotion of total human development.SACCOs develop people's minds by providing motivation, creating initiative, promoting self-development and self-reliance and providing leadership. They also develop material well-being by raisingthe living standards of members, making possible regular savings and wise use of money, providing loansat low interest rate and by making possible economic emancipation of members (Dejene, 1993).The first SACCO Society, in Africa, was introduced in Ghana in 1959. The SACCO was intended to assistvillagers improve their economic conditions (Ng'ombe & Mikwamba, 2004). English speakingnations were the first to adopt SACCOs. The first entrants into SACCO community include Ghana,Uganda, Nigeria, Tanzania, and Kenya. Most of the Non-English speaking nations in Africa startedappreciating SACCOs in 1960s, with major influx into SACCO community in 1970s (Mwakajumilo,2011).According to Sweden International Development Association (1996), Cooperative as a legal institutionfirst came into being in Ethiopia in 1960s/1953 E.C by cooperative proclamation number44/1961/1953E.C. The first saving and credit co-operative in Ethiopia was established in 1964 byemployees of Ethiopian Airlines. During the same period, one SACCO was established by employees ofthe Ethiopian Road Authority and the Telecommunication Agency.Different proclamation numbers have been provided to the National Bank of Ethiopia by the Derg regimeand the current government to promote and organize saving and credit cooperatives. But the rootedproblems of cooperatives are continued. Collecting and distributing available savings, credit and otherservices are performed traditionally. The aim of promoting these SACCOs in developing countries likeEthiopia, there are low levels of saving culture owing to poor, underdeveloped stock markets, dominance
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