Demographic and Behavioral Drivers of Informal Savings Group Participation: Evidence from Uganda with Broader African Implications Demographic and Behavioral Drivers of Informal Savings Group Participation

Abstract

This study explores the factors influencing membership in Village Savings and Loan Associations (VSLAs) using advanced statistical techniques, including Firth's penalized logistic regression and Random Forest analysis. Data were collected from a sample of 155 women in Luweero District, Uganda. The analysis identified significant predictors of VSLA membership, including age, regular contributions to savings accounts, financial influence from peers, and income levels. The predictive model achieved an area under the curve (AUC) of 0.87, indicating strong accuracy. The findings suggest that targeting older individuals and promoting consistent financial behaviors can enhance VSLA participation. Recommendations include designing outreach programs focused on these factors and implementing targeted financial literacy initiatives to engage younger individuals effectively, thereby fostering greater financial inclusion and community resilience.