An Investigation on How Savings and Internal Lending Communities Affect Household Welfare in Shangai Informal Settlement-Mpika-Zambia
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Date
2025-05
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Publisher
Kenyatta University
Abstract
The study aimed at assessing how Savings and Internal Lending Communities (SILC) affected household welfare in Shangai informal settlement. SILC is a kind of informal social security mechanism which is widely practiced by low-income households. In the informal economy, traditional and informal mechanisms provide social protection due to inadequate provision of formal social protection programmes. Shangai informal settlement has had experienced increased levels of SILC participation, however, how it affected their household welfare had not been researched. Therefore, this study was conducted to determine the effects of SILC participation as a social security mechanism on the welfare of Shangai informal settlers. The specific objectives of the study were to; determine demo- socioeconomic characteristics, know reasons for joining SILC, establish the challenges faced by SILC members and assess the effects of SILC on households’ welfare in Shangai informal settlement. The study used descriptive research design. Questionnaires were used to collect quantitative data and Key Informant Interviews (KII) were used for qualitative data. Study sample size was 112 which was arrived at through purposive sampling. Quantitative data was analyzed using descriptive statistics by use of SPSS version 22 and results were presented as means, frequencies and percentages. Qualitative data collected from 8 key informants interviewed was analyzed by content and classified according to major themes that were covered in the study. Examination on effects of SILC participation and household welfare was done by use of independent t test while examination of influence of SILC participation on socioeconomic empowerment was through use of paired t-test and chi square test with a p<0.05 as criterion of Statistical significance. Saving money, access to loans, and access to social funds were major reasons study participants joined SILC in Shangai informal settlement. This study established that SILC participation had positive effect on households’ welfare through asset accumulation of phones (p=0.044), bed (p=0.016), sponge mattress (p=0.014) and breakable plates (p=0.054). Main challenges faced by SILC study participants were non-repayment of SILC loan funds, late repayment of SILC loan funds, late reporting and poor attendance at SILC meetings. Study results further revealed that participation in SILC empowered informal operators with increased household monthly income (p=0.001) and funds for emergencies (p=0.054). Therefore, this study recommends to the government to capacity build SILC groups as viable social protection cover for the informal sector. Furthermore, comparative studies should be conducted between SILC participants and non-SILC participants in Shangai informal settlement as to determine if SILC could be an alternative financial intervention.
Description
A Thesis Submitted to the Department of Geography in Partial Fulfilment of the Requirements of the Degree of Master of Arts in Geography (Urban and Regional Planning) in the School of Law, Arts and Social Sciences, Kenyatta University, May 2025.
Supervisors
1. Philomena Muiruri
2. Jackson Musau