THE ECONOMIC CONTRIBUTION AND CHALLENGES OF SAVING

AND CREDIT INSTITUTIONS ( IN FITCHE TOWN)

SALALE
UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF ECONOMICS

SENIOR ESSAY SUBMITTED TO DEPARTEMENT

OF ECONOMICS INPARTIALFULFILMENT OFBACHLOR ART (BA) DEGREE
INECONOMICS

BY: TEKLU GETACHEW

ADVISOR: MARSEMOE BEKELE

DECEMBER,2021

FITCHE, ETHIOPIA
 CHAPTER ONE

INTRODUCTION

1.1 Background of the study

The government follows different strategies and plans to eradicate poverty. To do this the
government has motivated both the government and non-governmental organization to
contribute their effort in alleviating poverty to improve the consumption level and capital
formation. Among these means to improving productivity and living standard the provision
of credit system motivating the industrial sector to engage in international market with an
incentive such as exporting products can be implemented(Todaro, 1997).

The development of micro finance institution in Ethiopia is a recent phenomenon. The policy,
which provides for the establishment of micro finance institution have legally been registered
and started delivering micro finances services. In particular, the licensing and supervision of
micro finance institution policy of the government encourages the spread of micro finance
institution in both rural and urban areas as it authorizes them among other things, to legally
accept deposits from the general public, to draw and accept draftsman to manage funds for
the micro financing businesses(Getaneh, 2005).

Reducing unemployment and poverty is the primary goal of Ethiopian policy makers. For this
case the issue of micro finance activities have received a great attentions as more important
area that are stimulating economic growth in Ethiopia(world development report 2000/2001).

In most developing countries, government and international donors believe that poor societies
need credit as a way of promoting agricultural production of small land holders. In addition,
to provide subsidy for agriculture,donors setup credit unions(Hayami, Y.N.Ruttan/1995).

Poor households and other individuals denied access to institutional credit due to high
collateral and un liquidated lending practice of formal banks. For this reason, alternative and
innovative approaches to provide credit to poor and others has designed and successfully
tried in many developing countries. The main target of the program was specially for low
income societies who live in urban and rural areas(Tsehay Mengistue, 2002).
Proclamations number 40/1996, which defines the mandate of micro finance institution in
Ethiopia, creates favorable conditions for the establishment of micro finance institution in the
country. Following the endorsement of this proclamations,fitche credit and saving institution
has got legal personality to offer micro finance service and commenced its operation.

Today the focus is on providing financial service only, where as much of 1970s and 1980s,
characterized by integral package of credit and training and the institution have began to
transform in to providing saving services to their clients and to access market funding source
than relay on donors funds. To provide all their service, credit and saving institution
established in fitche town , since the resident are poor, how income and unemployment
segments. Those poor and unemployed people were not able to have access to financial
services provided by private and public banks particularly the loan services because of
perceived risks and lack of collaterals. On the other hands, the surrounding rural people do
not have even proximity to the service offered by conventional banks as they live far from
urban. (from where…

1.2 Statement of the problem

The majority of the world's poor live in the less developed countries irresistibly. Various
approaches have been developed in alleviating poverty and increase creation of employment
with provision of credit that targets the poor.It is believed that allowingthe poor to have
command over resources through credit can contribute towards poverty alleviation. The best
way to do something about poverty is to let the people do their own thing.Everybody will
have more motivation to change his life situation than suffer him.

It is generally accepted that credit,applied to productive use, results in good returns. But
credit provision is such a risky business that, in addition to other reasons of varied nature, it
may involve dishonesty behavior. The lender in the formal financial system is at a
disadvantage of information on the burrower’s behavior. Fortunately, group based micro
financing system that involves peer pressure and joint liability has evolved to counter
the problems of a conventional bank that provides a collateral backed credit alienating
the poor( Mengistu, 1997).

.
For such MFIs to be successful, they should be sustainable both financially as well as
institutionally. On top of sustainability one has to include developmental effects like increase
in income on the target group as core measure of success. For agencies that are involved in
the development or in assisting the development of a micro-credit institution, it is
recommended that sustainability should be the final goal, and therefore the only
indicators of success(Rudkins, 1994).

Although the performance of the MFIs in Ethiopia has been impressive since their
establishment, they are experiencing basic problems as can be observed in their declining
repayment rates.

Hunte(1996) argues that default problems destroy lending capacity as the flow of
repayment declines, transforming lenders into welfare agencies, instead of a viable financial
institution. It incorrectly penalizes creditworthy borrowers whenever the screening
mechanism is not efficient. Loan default may also deny new applicants access to credit as the
bank's cash-flow management problems augment in direct proportion to the increasing
default problem. It is obvious that many rural credit schemes have sustained heavy losses
because of poor loan collection. And yet a lot more have been dependent on government
subsidy to financially cover the losses they faced through loan default. But such dependence
will not prove helpful for sustainability. MFIs should rather depend on loan recovery to
have a sustainable financial position in this regard, so that they can meet their objective of
alleviating poverty and reduce unemployment. "Whether default is random and influenced
by erratic behavior or whether it is influenced by certain factors in a specific situation,
therefore, needs an empirical investigation so that the findings can be used by micro
financing institutions to manipulate their credit programs for the better(Khandker etal.1995).

In many developing counties, credit and saving institution are accepted as the most important
ways in creatoin of employment.By considering this, various credits and saving institution
established in Ethiopia and their number and coverage increased through time. One of them is
(credit and saving institution) also established in Fitche town for creation of employment and
improving the house hold income. Providing financial service to the poor plays the crucial
role in poverty and unemployment reducing strategy of the country. Therefore, credit and
saving institution have to be encouraged to diversify their services to all clients of poor
society.
Depending on the strategy of the country, Fitchecredit and saving institution started delivery
of financial services to the poor population of rural and urban resident of the Zone. This
financial delivery to the poor aimed to creation of employment and reduction of poverty
through giving financial assistance as a beginning capital. However there are still many
people in the labor force that do not get sufficient credit access in the area, which can resulted
in lack of job opportunity in the zone. Thus, this research bridges this gap by raising the
following research questions and at the end it will answer the following questions.

1.3. Research question

 What is the role of credit and saving institutions in fitche town?

 How credit and saving institutions play to creating employment as oromia regional state in the
fitche town?

 What are the challenges faced by credit and saving institutions in fitche town?

1.4 Objective of the study

1.3.1 General objective
The general objective of this study will be to examine the contribution and challenges of
credit and saving institution infitche Town.

1.3.2 Specific objectives

To examine the role of credit saving institutions in creation of employment.
To examine the role of credit saving institutions in income generation
To assess the challenges faced by the credit and saving institutions in fitche town

1.4 Significance of the study

This study may provide some important information about the role of credit and saving
institution in the creation of employment. It also provides valuable information on Fitche
town branch of credit and saving institution. Thus, it can serve as a proceed board to carry out
further research on saving and credit institutions in the creation of employment

1.5 Scope of the study

This paper focuses on identifying the major factor that affect individual willingness to pay
for improving the level of credit and saving institutions in Fitche town.
The particular purpose of the study will mainly delimited on the prevailing role of credit and
saving institutions in providing job for the society in the Fitche town. The respondent will be
the individual living in Fitche town.

1.7 Organization of the study

This proposal includes three chapters; the first chapter includes the introduction, statement of
the problem, objective of the study, significance of the study, scope of the study and
organization of the study. The second chapter will contain review literature and the third
chapter will be dealing with methodology.

Chapter two

2. Literature Review

2.1 Theoretical Review

2.1.1 The origin of Saving and credit institutions

Before 1970s credit delivery intervention to advance development in third world countries
focused on building agricultural lending institution, the effort however, failed short of
expectation. Nevertheless, the initiative continued from the experience and expertise shared
from the developed country. In this regard Ethiopia had tried to pass their former African and
Asian countries. Similarly,America’s experience before world war second strongly
influenced the rest of the world using the United State donor agencies as a means to promote
credit institution .

The emphasis of all the financial services was agricultural credit to farmers for investment
and input to promote agricultural production.Those who show exploitable resource and
provide reliable collateral were promoted for the credit in the 1960s and1970s in Ethiopia.
The agricultural development bank of Ethiopian established in the 1950 with this mind.
Nevertheless, by early 1970s, the earlier rural credit approach started to fail in an attempt to
stimulate grass root agrarian productivity. Food shortage and famine overlook the million
agrarian productivity enhancement of agricultural credit. It becomes increasingly apparent
that they all face problem in many agricultural credit program, loan recovery difficulties,
weak lending institution and heavy dependency on subsidy plagued the effort side by side
with rural and urban poverty increase. This lead to a situation that rural and urban poverty
increase.it also leads to a situation that rural urban migration has increased due to a situation
increased rural poverty.

2.1.2 Bank, credit unions and saving institutions

Credit unions are different from traditional bank in that they are non-profit cooperative owned
institutions that take deposits and make loans.

Accounts holder's are considering members of the credit union and deposits are seen as buying shares
in the credit union.
Customers must meet specific credit qualifications criteria to join , often based affiliations with
a business , unions or group. These members are paid dividend on the credit unions earning much as
share holder's are paid dividend on a company stock earnings.
Because credit union generally have fewer customers and fewer employment than banks the inter
personal connection between the two are often stronger than those in banks and credit unions often
offer higher interest rate to depositer and lower loan rate to borrowers than their commercial
counterpart . Credit unions can be both federally and locally chartered and are federally insured .
They are exempt from federal taxes and place various restrictions on membership .
Though members once were required to share membership through working religion, many credit
union now are open to people who live or work in geographical areas.
Bank; the commercial and saving banks to credit union and trust companies ,consumer have a
dizzying arrays of choice for saving and borrowing many.
Lending institutions vary in structure and purposes some like the large national banks lure customers
with menus that allows customers to not only deposits saving but also invest in stocks and borrow for
out to loan mortgage and personal and small business loans.
Smaller institutions often promoted personal service and higher yields investment products to attract
business , also offer a variety of lending options (jonna Layer, 2003).

2.1.3 The role of credit and saving institutions

Credit institutions

savings banks originated at the end of the 18th century and the beginning of the 19th Credit
institution, and basic function of which consists in attracting monetary savings and
temporarily free monetary resources of the population. In the capitalist countries the assets
accumulated in savings banks are one of the sources for the banks promote the redistribution
of national in come in the interests of the ruling classes. The millions entrusted to the savings
banks are in the final analysis actually controlled by these very same bank capital mangnates.
in most countries, h . Savings bank were established by private companies, municipalities,and
the state, especially form the second half of the 19th century. usually ,the state savings banks
were closely linked with the postal system. During the stage of imperialism the money
attracted to the savings banks is channeled through the state credit system and is used chiefly
to finance the military expenditures of the imperialist states and cover the budget deficit.

credit institution the role of credit officers as an important means of dealing with asymmetric
information .

Ccedit institutions are responsible for collecting information about potential solvency of credit

applications. The structure model of credit provisions in which officers ability is explicitly considered
using data from Brazilian NGO. in the model , credit performance affects the selection and
enforcement of the contract.

Credit officers ability affects the the probability of success of the project as well as the outcome from
the auditing process of those who declared failure the results suggest that

:● substantial heterogeneity was observed among credit in the sample

● credit institutions ability has a measurable effects on loan success.

● ability is correlated with experience.

● probability of success of credit contract is highly correlated with the estimated ability.

Saving institution

financial institution that ,until recently, performs only the following functions, receiving savings
deposits of individuals , investing them, and providing a modest return to its depositors in the form of
interest . A common form of savings bank, the mutual savings bank ,was traditionally the only type
that accepts savings deposits exclusively .

banks are stete-chartered institutions , owned by their depositors and managed for their
mutual benefit by self-perpetuating boards of trustees. Savings deposits may also be received
by a credit union or a savings and loan association.
However ,due to extensive deregulation in the banking industry (primarily during the 1980s),
the distinction between savings banks and other financial institutions has become
increasingly hazy. Federal deregulation law in the 1980s gave savings bank the opportunity to
become federally chartered institutions, to convert themselves in to capital stock
corporations, and to come under the supervision of the federal home loan

bank board. New lending powers, the removal of ceilings on interest rates, and takeover of
struggling small banks by large ones have made the mutual savings banks, as it was
understood until about 1980, largely absolute

2.2 .Attributes of credit and saving institutions

Microfinance has different contribution to the growth of countries. According to,

(JonnalLegarwood, 1998) a credit and saving instittutions has two attributes. Those attributes
are:-

A) It provides service to the relevant targeted groups

Appropriate services include the offering of loans that match clients demand. This refers to
loans and ensuring repayment. A good micro finance hesitation have or be willing to adopt an
appropriate credit technology, which will enable quality service to be designed and
distributed so that they are attractive and accessible to the targeted group. The scope of the
service must be consistent with the situation of the client. In some cases, simply offering
loans of specific types may be mere important to offer deposit and payment transfer facilities
of a combination of all these services price that the client have to pay for the services of the
institutions are not generally apoint of major importance, according to a practical importance
however, low transaction cost for client, a high degree of deposit liquidity, and rapid
capability of loans are extremely important features for a targeted groups oriented institutions
to provide(JonnaLegarwood, 1998).

B) It is strong, financially sound and stable

Because the people who belongs to the target group need a reliable supply of financial
services that is access credit facilities and an institutions to which they can entrust their
deposit, it is paramount important. A stable institution is one whose existence and function
not treated by a lack of fund for making necessary payment, it must be able to maintain and
expand its scale of operation. This is important for two reasons. One is that a growing
institution can meet the demand that is client tribally explicit. The other is that, development
financial institutions that lend to poor client are so small that the unit cost of their operation
are too high. Growth to be efficient micro finance institutions (MFIS)sometimes claim that it
should not depend on external support but rather should subsidize itself. This required that
the revenue from its operation be sufficient to overall cost including loans loses, the
opportunities cost of equity, and the full inflation adjusted cost of debt. The (MFI) must be
able to and determine to make visible progress towards financial self-sufficiency. Not all
aspect of stability can be ready expressed in number. One such expects is organizational
stability. Sound micro finance institution must have to an organizational and ownership
structure that helps to ensure its stability both in financial sense and with respect to its target.
Once it is institutionally stable,it simply turns away from its original target group or the poor
clients as soon as it starts to grow and become efficient and professional. The temptation is
great, as poor people are the most profitable target group or the easiest to deal with it
(JonnaLegarwood, 1998).

2.2.1 The key feature of micro finances in saving institutions

There are many point of departure between the traditional financial services and the
innovative micro finance to alleviate poverty. In addition to the institutional principle, the
financial services for the poor maintains key features as out lined below (Berhanu, 2003)

A) Cost reduction

One of the inhabiting factors often cited by the formal finance institution for their disregard
to the financial services needs for small borrowers is the high cost of small loan processing
and administration substantially reduced. It has managed to provide cost sharing system
where clients and services share the cost sharing system arise out of loan administration
(Berhanu, 2003)

B) Efficiency in loan appraisal

Viability assessments of a small loan of the poor have always been difficult and do not worth
the effort for commercial banks. Consequently, they have adapted to small borrowers. The
innovative approach (the new approach) adopted a system of collective (joint approach with
the client). Community that enables to get access of information, which otherwise would not
have been possible for bank officers setting behind his desk in luxurious office. The principle
of partnership and transparency has made it practically possible for micro finance to
efficiently appraised small loans for enterprising the poor (Berhanu, 2003).

C) Risk minimization

This is no risk free business venture. Successes in financial business highly depend on the
ability to avoid or minimize risk. In banking business, the poor who could not produce
reliable collateral classified as credit risk to avoid the innovative approach. On the other
hands, they come up with system of social collaterals where defaulters socially sanctioned.
Risk minimization begins with programmatic loan appraisal that highly depends on the
community and per group pressure rather than cash flow and of their methods of loan
appraisal technique (Berhanu, 2003).

2.2.2 The major challenge of credit and saving institutions

Credit institution needs to consider internal financial risk (credit, liquidity and interest rate)
and operations risk (Birhanu, 2003).

A) Credit risk
Credit risk is the most important of the risk categories. It is potential loss resulting from the
poor quality of credit institution asset particularly its loan portfolio. The most obvious
gestations of the rise in credit project are poor portfolio quality that leads to debt losses that
in turn erode the capital of lending credit institution (Birhanu, 2003)

B) Liquidity Risk

Liquidity risk is the ability of credit institution to meet its obligation when the credit
institution is in a liquidity position. It is able to meet its current obligation as they became due
to its lucidity position. If it is, enable to meet claims for difficult. Liquidating management is
the process of insuring that the demand for fund is readily available at an operational level.
Risk management by leaders requires attention to liquidity when adversity strives borrower
are less likely to repay and depositions may want to drawn their saving balance effective
liquidity management to understanding impact of changing marketing condition and the
ability to liquidate asset quickly to meet increased demand for loan or withdrawal from
saving (Berhanu,2003)

C) Interest Rate Risk

Interest rate risk is a risk of financial loss from fluctuation in market interest rate. It arises
when interest rate on asset and interest rate on liquidity is missmatch both in that and terms.
Interest rate interest risk occurs when credit institution will have to cope with the risk and
uncertainties of macroeconomic stability of unpredictable inflation rate. When inflation rate
arises of interest rate set on loan will not be enough to offset the effect of inflation. In
addition, when the cost of funds goods up faster than the credit institution can adjust its
lending rate (Birhanu, 2003).

D) Operating Risk

Operating risk refers to the risk of losses or unexpected expenses associated with fraud in
efficiency, human errors and unforeseen contingencies.(Birhanu,2003)

2.3 credit and saving institutions in Ethiopia

Similar to many African countries credit and saving in Ethiopia has developed as a means to
reduce unemployment and poverty. However, due to the government strategy to develop the
rural sector and to micro finance historical ties,Micro finance institution extended credit in
cash or in kind to peasant farmers or urban small enterprise that the loan size to which fixed
by the bank.

These MI delivered credit, saving demand and time demand pension fund management,
money transfer purchase its treasury bill and some other instrument. This MFI in Ethiopia
prohibited to accept do not fund only without ministry of finance approval. Recently MFI has
shown remarkable growth in terms of outreach among the poorhouse hold by spreading its
branch and operation in region, where the incidence of poverty is the highest (Abby, 1998).

In conclusion some of the main analysis of credit and saving institution could play are:

A. Employment creation

It provides initial capital or investment for their willing capable and ready to engage in
income learning employment. The approach emphasized the use of locally available resource
and skill to obtain self-sufficient of low cost.

Creating job in the manufacturing and service sector has great potential in the medium

term, but increasing productivity and income of the many people in traditional agriculture
also need to remain a priority in the short-term.

Contribution of job creation is crucial to understand the constraints that private companies
face in creating jobs.

This aims to help by providing an understanding of how the private sector generates jobs,
what constraints limit job creation and how the problem can be mitigated.

I) Full Employment Creation

expenditure should be incured for increasing employment and for acheiving full
employment.creation .

employment increase in developing countries play one of the most important role in the
growth of economy. major problem faced by the people is the problem of the unemployment
that leads to low standard of living ,poverty, backwardness, and ignorance .
To generate employment , public expenditure should be incured on setting up new
industries , encouraging small _ scale and cottage through financial subsidies expenditure on
training schemes.

Among many ways to indicate the creation of employment are:-

~Capital formation

economic development of the countries depend on the rate of capital formation in

developing countries .The government economic policy should concentrate on production

and fiscal policy and act as a tool of capital formation.For rapid capital formation , the
government should incure expenditure on the establishment of basic and heavy industries ,
infrustructure development , such as power projects, transport sectors means of
communication etc.

~Economic stablization

Economic stabilization is yet another responsibility of the government which has

economical significance. The problem arise whenever there is economic instability such as
inflation, deflation and recession.Public finances may be used to secure economic stability
or to remove economic fluctuations.

B) Rural development Extension Service Facility

The agrarian life of the peasantry requires agricultural inputs, improved implement and
adaptation of new technologies and methods. Financing of these inputs requires liquid cash
that often is not readily available with the peasants. Hence, provision of saving and credit
institution services to their door steps would respond to the poor farmers timely.

C) Enhancement of food security

Food security at a household level is defined in its more basic form as access by all people at
all time. The concept of credit and saving for food security addresses financial service
demand for agricultural production but also include other demand for households, such as
financing food consumption, health care, safeguarding the asset base for the household or
investing non-agricultural self-employment strategies. Under this circumstance, saving and
credit for poorhouse holds would facilitate.

2.3.1. Empirical Literature review

Almost all saving and credit institution helps in generating income and employment
opportunities for poor households in order to reduce unemployment and poverty as their
objectives. The expected out from their operating is that at house hold level increasing
income passion of assets and welfare improvement in terms of health, education, housing,
etc. At the individual level it is expected to lead to increases in control of net cash flow,
while at the community level it is expected to increase paid employment.

According to the (montage ,2002) evaluation of micro-finance lending project indicate that
such program can improve poor people living standard.

Studies on industrial development of different countries have show that the informal sector
constitutes an integral part in the overall industrial sector and plays an effective role in the
growth and development of these countries. These enterprises contribute significantly to
employment generation and output growth of different developing countries.

In Nigeria, this sub sector accounts for about 70% of total industrial employment, generate
about 6.2% of aggregate employment in US, 22.3% IN China, 50% in India, as well as about
70% in Israel (May Land, 2004). The forgoing therefore, points to the fact that the informal
sector given the needed support and regulatory framework could be a major player in the
combat against unemployment in developing countries. However, the formal sector cannot
operate effectively at this task without the support of the key players, which is the availability
of credit as the best of ideas may never translate to reality without to make it happen credit
fund, hence the availability of credit to finance the informal sector cannot be under placed.

Generally, it is difficult to measure unemployment in less developed countries such as

Ethiopia because of lack of reliable records and the existence of various informal types of
work. However, based on ministry of labor survey and numerous other analyses, a general
assessment of unemployment in Ethiopia can be made. According to the ministry of labor, the
unemployment rate increased 11.5% annually during the 1979/88 there were 715,065
registered unemployed workers in 36 major towns. Of these registered, 134,117 ultimately
found jobs, leaving the remaining 580,948 unemployed. The urban labor force totaled 1.7
million in 1988/89. The ministry of labor indicates that the government employed 523, 00 of
these workers. The rest relied on private employment or self-employed for their livelihood
(Data as of ,1991)

CHAPTER THREE

3. METHODOLOGY OF THE STUDY

3.1 Description Area of The Study
The study will be conducted in Girar jarso woreda which is located in Oromia region, North shoa
zone (Selale); 112 km North of Addis Ababa via Sululta. The woreda lays on the way of Addis Ababa
to Debre Markos. Geographically, the woreda lays between 9°48' latitude north and 38°44' longitude
east. Girar jarso woreda is bounded by yaya Gulele in the south, Dagem in the west, Debre libanos in
the east and Amhara regional state in east and north. Girar jarso woreda as an area of 42763 hectare
and divided in to 17 kebeles. The mean annual precipitation is range from 1200mm
to1400mm.Temperature vary between15°c winter and 18°c in summer and experience a dega
ecological zone

3.2. Target population

The target groups of this study will be the community of the fitche town that is assumed
as the major sources of credit and saving institutions and workers of credit and saving
institution of the fitche town and their clients and unemployed labor force in the town.

3.2.1. Data Collection and Sampling Techniques

The study will carry out in fitche town which is the administrative center of North Shoa
Zone. The study uses primary and secondary data, the primary data will be collected with the
use of structured questionnaires. House-to-house data collection will be performed. Simple
random sampling technique will be used to select sample individual for the study.

3.3 source and nature of the data

In order to investigate the relevant information I will use both primary and secondary source
of data.

Primary data: The primary data will be collected through a face-to-face personal interview
with selected households by means of questionnaires.
Secondary data: secondary data in the study will be gathered from magazines, annual
reports of fitche town and various leading journals, articles form Internet and other related
documents.

3.4. Sampling and Sample size determination

3.4.1. Sampling method

Systematic and simple random sampling methods are suitable to achieve the objectives of
the study. All data shall be collected from different households who are living in the
town. In order to obtain relevant and reliable information, systematic random sampling
techniques will be used to select a sample from each kebele. Then, to collect data from the
identified Kebeles,I will use simple random sampling and collect data from the community
who get benefit from CSI. These techniques of data collection is preferred to avoid bias and
ambiguity with data collection and cost minimization. Since the collection of data from the
whole population is very difficult, costly and time consuming,I will prefer to use these
sample methods based on the availability of time and cost.

3.4.2. Sample size

The sample size for collecting quantitative data for this research will be determined
by using the following formula to calculate sample size. According to (Cochran’s, 1977)
when the population is homogeneous this formula is important to select sample size. I will
use this formula and identify the sample size since the population of Fitche town is
homogeneous. Where the total population is about 107044 which will be the target
population; from this calculating sample size as

n=N/1+(N*e^2).........................
where :- e=margin of error is 10%
N=Total target of population=107044
n=sample size
n=107,044/1+(107,044*e^2)=99.9~100
hence n=100
 3.5 Method of Data Analysis

After the data is collected from Fitche town community and the credit and saving Institution

office using both primary and secondary source of data, I will employ descriptive method of data

analysis. As a descriptive analysis, simple statistical methods like percentage,averages,table

computation of average, graphs and other descriptive method will

be used