THE ROLE OF MICROCREDIT AND MICRO SAVINGS FOR RAISING MICROFINANCE SUSTAINABILITY IN SOMALI

Abstract

The purpose of the study was to examine the impact of microcredit and micro saving on increasing the sustainability of microfinance in Somalia, using Amal bank as a case study. A sample of 120 participants, including bank employees, managers, and customers, were surveyed through questionnaires. The collected data were processed using SPSS and Excel and presented as tables showing frequencies and percentages. The study found a positive correlation between microcredit, micro saving, and microfinance sustainability. The results showed that microcredit is the most influential factor in maintaining the sustainability of microfinance. An increase in microcredit and micro saving for the low-income population leads to an increase in microfinance sustainability and job opportunities. Additionally, the study suggests that micro-saving positively impacts job creation, which implies that micro-saving relies on microcredit and job creation. Hence, microfinance organizations provide small savings accounts to low-income families or individuals as an incentive to save for future needs. Furthermore, a positive relationship exists between microfinance and employment. This means microfinance is in conjunction with microcredit and micro saving in job creation; increasing microcredit and micro saving also increase microfinance in job creation. Finally, regarding the job creation of society, the researchers recommend that the government of Somalia make a plan to maintain the sustainability of microfinance to reduce unemployment in Somalia because this country has one of the highest rates of unemployment in the world.