THE CONTRIBUTION OF VILLAGE SAVINGS AND LOAN ASSOCIATIONS(VSLAS) TO THE ENTREPRENEURSHIP GROWTH IN RURAL AREAS. A CASE STUDY OF MURIRINYI B CELL,BUBULO WARD,MANAFWA TOWN COUNCIL,MANAFWA DISTRICT IN EASTERN UGANDA
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Date
2026-09-01
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Busitema University
Abstract
ABSTRACT
This study examined the contribution of Village Savings and Loan Associations (VSLAs) to entrepreneurship growth in rural areas, with a specific focus on Muririnyi B Cell, Bubulo Ward, Manafwa Town Council, Manafwa District, Eastern Uganda. Rural entrepreneurs in this area face significant barriers to business growth including limited access to affordable credit, high interest rates from informal lenders, lack of collateral, and exclusion from formal financial institutions. VSLAs have emerged as a community-based microfinance mechanism that provides accessible savings and credit services to underserved rural populations, enabling them to invest in income-generating activities and expand their businesses. The study is guided by five theoretical frameworks: Schumpeter’s Innovation Theory of Entrepreneurship, Social Capital Theory, and the Financial Inclusion and Asset-Building Theory, Life Cycle Theory of Consumption and Keynesian Theory of Savings. It adopts a cross-sectional descriptive research design using mixed methods (both quantitative and qualitative approaches). A sample of 20 respondents was be selected, comprising fifteen (15) VSLA members engaged in entrepreneurial activities and five(5 ) VSLA group leaders. Data was be collected through structured questionnaires, semi-structured interviews, and document review. Quantitative data was be analysed using SPSS version 25, while qualitative data was be analysed through thematic analysis (identify, analyze and interpret patterns). The study seeks to evaluate the role of VSLA services in facilitating entrepreneurship expansion and diversification, identify factors influencing savings behaviour among rural entrepreneurs, and examine the socio-economic and institutional challenges affecting the use of VSLA loans. The findings of this study are expected to benefit policy makers, academicians, rural entrepreneurs, and VSLA members by providing empirical evidence on how VSLAs contribute to measurable entrepreneurship growth indicators such as business profitability, asset acquisition, employment creation, and business sustainability in rural Manafwa District.