Does Group Design Affect Savings Mobilization of Rural Agricultural Micro Credit Groups? Evidence from Nigeria

Savings is both a risk management strategy and determinant of magnitude of investment but its determinants and mobilization strategy are controversial issues in literature. This study thus aimed at investigating the effects of group design characteristics on savings among rural agricultural micro-credit groups in Nigeria. The study was conducted in Imo state of Nigeria. Using two micro finance institutions that were purposely selected, 54 micro credit groups were randomly selected via stratified sampling from the two micro finance institutions afore-selected. Descriptive statistics and multiple regression technique were used in data analysis. Results show that some problems limiting the access to group formal financial services are not only related to one another but are caused by group members and coordinators. It also shows that gender composition, membership size, age of the groups and frequency of meeting per month are inversely related to savings while fund size and random method of allocation are directly related to savings. The study recommends among others, formation of groups by younger farmers, based on the dictates of lifecycle hypothesis.