To be a department of high repute with regard to research, application and transmission of knowledge in social sciences to promote social development.

PDF version



The purpose of this study was to evaluate the effects of member owned financial institutions on the diversification of livelihoods in Embu county using financial services associations as the case study. Embu county is known as an agricultural zone with the north side growing cash crops while southern is known for subsistence farming. The study therefore evaluated whether with the implementation of the financial services association there has been either other types of farming and source of income activities started or introduced. Livelihood diversification in this study was used to refer to attempts by individuals or households to expand or find new ways to raise incomes and reduce environmental risks which differ sharply by the degree of freedom of choice and the reversibility of the income..

The main objective of this study was to investigate the effects of member-owned financial institutions on the diversification of livelihood among rural households. The specific objectives focused on finding out whether FSA credit, shareholding, ,business training affect diversification of livelihoods, whether the household savings affect the decision of shareholders to borrow credit and whether diversification of livelihoods contributed to increased income levels.

 The study reviewed related literature which included a brief overview of Member-owned financial institutions, Financial Services Association model, Compared to other community –owned institutions the FSA model has the following principal strengths. Challenges faced by FSAs, Livelihoods diversification and Theoretical framework and conceptual framework.

This study applied the survey design which is an attempt to collect data from members of a population in order to determine the current status of that population with respect to one or more variables (Mugenda 2003). The survey design seeks to describe the existing phenomena by asking individuals about their perceptions, attitudes and behavior or values. It is a type of descriptive research (Mugenda 2003).

The target population consisted of the active shareholders in the four FSAs under study namely Kigumo, Kithimu, Kevote and Kiritiri. The shareholders comprised of male and female adults of the particular locations where the FSAs are located. Members of the sample were selected using probability sampling. It ensures that each item of the universe has an equal chance of inclusion in the sample interest from the sample population. The study applied stratified random sampling because the population was not a homogenous group (kothari1990). Systematic sampling was used to select the samples in every stratum.

Questionnaire, key informant interview and focus group discussions were used to collect data. A pretest was carried out on a population similar to the target population in order to assess the validity of the instrument.

Data was analyzed using SPSS (Statistical package for the social sciences) and presented by use tables, pie charts and graphs. The findings were summarized, conclusions and recommendations made from the study.