Community groups as an enabler for access to livelihood capitals, deprivation of which contributes to multidimensional poverty in rural Uganda

Abstract

Using the 2016/2017 and 2019/2020 Uganda National Household Survey (UNHS), this study analyses the effect of saving and credit community groups, both cooperatives and associations, on multidimensional poverty. Access to livelihood capitals reduces poverty. Poverty being a rural phenomenon in Uganda, this study assesses whether households in rural Uganda with community group members have access to livelihood capitals. The study also examined the effect of non-membership in a community group on multidimensional poverty and whether being multidimensionally poor affects membership in community groups. The Alkire-Foster method is applied to calculate the Adjusted Headcount Ratio (M0), which is used in the propensity score model to establish the effect of membership in a community group on household multidimensional poverty. Analysis of how the estimated multidimensional poverty varies with the estimated propensity score is achieved using the estimated Average Treatment Effect of the Treated (ATET) obtained with four matching methods (nearest neighbour, radius, kernel, and stratification). Findings reveal that community groups enable rural dwellers to access livelihood capitals, hence enabling them to overcome their multiple deprivations and reducing their likelihood of being multidimensionally poor. Membership in community groups is robustly linked to a decreased probability of being multidimensionally poor by over 3 percentage points.