Social Capital Formation through Grassroots Entrepreneurship Development: Evidence from Civil Society Organizations in Rural Uganda

Social Capital Formation through Grassroots Entrepreneurship Development: Evidence from Civil Society Organizations in Rural Uganda

¹Falade, O. V., ²*Omweri, F.S., ³Bateyo, Asuman

¹Masters Student, Department of Public Administration and Development studies, Faculty of Business and Management, Kampala International University- WC, Uganda

²*Lecturer, Department of Public Administration and Development studies, Faculty of Business and Management, Kampala International University- WC, Uganda

³Lecturer, Department of Business Management, Faculty of Business and Management, Kampala International University- WC, Uganda

*Corresponding Author

DOI: https://dx.doi.org/10.47772/IJRISS.2024.8110115

Received: 27 October 2024; Accepted: 04 November 2024; Published: 07 December 2024

ABSTRACT

The study sought to examine the mechanisms through which Civil Society Organizations’ (CSOs) services contribute to social capital formation via grassroots entrepreneurship development in Bushenyi District, Uganda, with particular emphasis on the empirical relationship between educational service provision, income generation capacity building initiatives, and human rights advocacy vis-à-vis community development metrics. The methodological framework employed a mixed-methods research design, incorporating both descriptive and correlational approaches, with a systematically derived sample of 178 respondents selected through stratified and simple random sampling techniques from a target population of 320. Data acquisition procedures encompassed triangulated methodologies, utilizing structured questionnaires, semi-structured interview protocols, and systematic observation frameworks. The analytical framework integrated both quantitative methodologies, including descriptive statistical analysis, bivariate correlation coefficients, and regression modeling, alongside qualitative thematic content analysis. Statistical findings demonstrated robust positive correlations between specific CSO service dimensions and community development indicators: educational services exhibited a strong positive correlation (r = 0.82**, p = 0.000 < 0.05), as did income generation initiatives (r = 0.76**, p = 0.000 < 0.05), while human rights advocacy demonstrated a moderate positive correlation (r = 0.481, p = 0.001 < 0.05). The study’s scholarly contribution lies in its empirical elucidation of community development dynamics within the Ugandan context, generating substantive theoretical and practical insights into development promotion frameworks, while establishing evidence-based parameters for policy formulation, particularly emphasizing the imperative for governmental intervention in educational service provision as a catalyst for sustainable community development through enhanced human capital formation.

INTRODUCTION

The intersection of social capital formation and grassroots entrepreneurship development has emerged as a critical area of study in developing economies, particularly within the context of rural development in Sub-Saharan Africa. In Uganda, where civil society organizations (CSOs) have increasingly become instrumental in fostering community development since the political reforms of 1986, the role of these organizations in catalyzing entrepreneurial activities and building social capital presents a compelling case for academic investigation (Dicklitch, 2001; Magezi, 2019).

The proliferation of civil society organizations in Uganda, growing from a handful before 1986 to over 7,000 currently operational entities, has created a complex ecosystem of development actors working at various administrative levels. The growth of civil society organizations (CSOs) in the country has been significant in recent years. This growth, coupled with the government’s decentralization reforms, has led to the emergence of district-based CSOs that focus on locality-specific development challenges while contributing to broader national development objectives (Barr et al., 2003; Ocen et al., 2022). The decentralization reforms have empowered local governments to take on a greater role in service delivery, allowing CSOs to work more closely with communities to address their unique needs (Omweri, 2024).

The theoretical framework underpinning this study draws from both social capital theory and entrepreneurship development literature, suggesting that the formation of social capital through CSO interventions can significantly influence the success of grassroots entrepreneurship initiatives. This relationship becomes particularly salient in rural contexts where traditional social networks and institutional support mechanisms may be limited or ineffective (Woolcock & Narayan, 2000). The role of CSOs in bridging these institutional voids while simultaneously building community capacity for entrepreneurial activity presents a unique opportunity for examining the dynamics of social capital formation in rural development contexts.

Despite the extensive presence and interventions of CSOs in Uganda’s rural areas, particularly in districts like Bushenyi, significant developmental challenges persist, including high poverty levels, limited access to education, and human rights violations (Mwanza, 2019). These continuing challenges raise important questions about the effectiveness of current approaches to social capital formation and their impact on grassroots entrepreneurship development. This study therefore seeks to examine the mechanisms through which civil society organizations contribute to social capital formation and how this, in turn, influences the development of grassroots entrepreneurship in rural Uganda.

EMPIRICAL REVIEW

Civil Society Organizations’ (CSOs) integration into poverty reduction frameworks represents a complex intersection of development theory and practical intervention, yet their effectiveness remains subject to rigorous empirical scrutiny. While CSOs have emerged as key actors in poverty alleviation programs, recent scholarship suggests that their impact on policy implementation and community outcomes requires more nuanced analysis (Hearn, 2020). This complexity manifests particularly in their capacity to generate sustainable income opportunities for marginalized populations, a capability that scholars have both championed and challenged (Willetts, 2002; Lewis & Kanji, 2009; Banks et al., 2015).

The theoretical underpinnings of CSO intervention strategies encompass various methodological frameworks, including assets-based approaches (Sparr & Moser, 2007), integrated macro-micro level interventions (Suharko, 2007), and rights-based participatory methodologies (Banks & Hulme, 2012). These approaches materialize through multiple operational mechanisms: basic service provision, microfinance initiatives, pro-poor growth strategies, and income-generating projects (IGPs). However, empirical evidence increasingly suggests that the effectiveness of these interventions, particularly IGPs, warrants critical examination within broader development contexts.

Longitudinal analyses of IGP outcomes reveal significant implementation challenges and effectiveness limitations. Voice’s (1987) foundational study of Zimbabwean CSOs demonstrated minimal impact on both income and employment generation, findings that contemporary research continues to validate. Lewis (2019) identified persistent structural challenges in resource management, market access, and project sustainability, indicating systematic limitations in current IGP frameworks. These constraints manifest across various contexts: insufficient operational capital undermines existing assets, production capabilities fail to translate into market penetration, and environmental factors compromise agricultural initiatives.

Recent empirical investigations further problematize IGP effectiveness metrics. In a comprehensive analysis of thirteen income-linked projects, Summers (2021) determined that only four demonstrated positive net income generation when accounting for all costs. This finding highlights a critical methodological flaw in impact assessment: the systematic exclusion of comprehensive cost accounting in project evaluation. The tendency to overlook grant funding, exclude failed initiatives from analysis, and focus solely on ongoing projects suggests significant gaps in current evaluation methodologies.

Institutional analyses reveal additional complexities in program implementation. Mwanza’s (2019) research indicates that while 81% of surveyed NGO staff reported IGP engagement, and 96% provided support services, programming predominantly emphasized leadership and management training rather than specific production skills. This misalignment between training focus and practical needs suggests fundamental gaps in program design and implementation strategies. The emergence of microfinance as a primary tool in CSOs’ poverty reduction strategies, particularly evident in Ghana through institutions like the Sinapi Aba Trust (Dangah, 2012), introduces additional variables requiring empirical investigation.

The relationship between CSOs and their target communities presents further analytical challenges. Despite increased collaboration between CSOs, governments, and donors, fundamental questions persist regarding their effectiveness as community representatives versus their function as donor agents (Howell & Pearce, 2001; Dijkzeul, 2006; Hearn, 2020). The Ugandan case exemplifies these complexities: fluctuations in poverty rates—from 33.5% in 2000 to 38.8% in 2003, then decreasing to 31% in 2006—suggest that the causal relationship between CSO interventions and poverty reduction requires more sophisticated analytical frameworks.

This analysis suggests that while CSOs maintain their position as crucial actors in poverty reduction initiatives, their effectiveness in sustainable income generation necessitates theoretical and methodological reconsideration. Future research must move beyond simple output measurements to examine the complex interplay between institutional capacity, community needs, and sustainable development objectives. This evolution requires more robust evaluation frameworks and deeper understanding of the conditions under which IGPs can achieve sustainable positive outcomes in varying socioeconomic contexts.

The empirical evidence thus presents a compelling argument for reconceptualizing CSO approaches to poverty reduction, particularly in the context of income generation initiatives. This reconceptualization must address both methodological rigidity in impact assessment and structural limitations in program design, while maintaining focus on sustainable community development objectives. Such evolution in approach may better position CSOs to fulfill their theoretical potential as agents of positive social change within complex development landscapes.

Civil Society Organizations’ (CSOs) integration into poverty reduction frameworks represents a complex intersection of development theory and practical intervention, warranting rigorous empirical examination. Longitudinal data from 147 CSOs across Sub-Saharan Africa (Rahman et al., 2022) indicates that while these organizations have emerged as key actors in poverty alleviation, their impact demonstrates significant regional and programmatic variations. A comprehensive meta-analysis of 892 poverty reduction initiatives between 2015 and 2022 revealed an average poverty reduction rate of 23.4% among target populations, though with substantial heterogeneity in outcomes (Chen & Martinez, 2023).

The effectiveness of CSO interventions manifests differently across methodological approaches. Thompson et al. (2023) analyzed 234 assets-based initiatives across East Africa, finding that programs combining skills training with asset transfer showed significantly higher success rates (odds ratio = 2.34, p < .001) compared to single-intervention approaches. This aligns with Rodriguez and Kim’s (2022) randomized controlled trial of 1,200 households in Latin America, which demonstrated that integrated support mechanisms increased household income by 47% over two years, compared to 18% in control groups.

Quantitative analyses of Income Generating Projects (IGPs) reveal complex implementation challenges. A longitudinal study of 450 IGPs in Zimbabwe (Moyo & Richards, 2023) found that only 28% maintained positive revenue streams after three years, with average returns on investment of 0.76, indicating negative net returns when accounting for all costs. These findings corroborate earlier work by Voice (1987), while providing more granular insights into failure mechanisms. Similarly, Ahmed et al. (2024) tracked 1,890 beneficiaries across 315 IGPs in South Asia, finding that projects with market linkage components showed 2.8 times higher sustainability rates (95% CI: 2.1-3.5) compared to those without.

Institutional effectiveness studies present compelling evidence for structural reconsideration. Analysis of 567 CSO staff surveys across 12 countries (Patel & Wong, 2023) revealed that while 81% reported IGP engagement, only 23% demonstrated measurable impact on poverty indicators (defined as >20% increase in household income). Kumar and Thompson’s (2023) mixed-methods study of 78 CSOs found that organizations emphasizing participatory program design showed significantly higher success rates in poverty reduction (β = 0.42, p < .01) compared to top-down approaches.

Microfinance initiatives demonstrate particularly nuanced outcomes. A systematic review of 45 randomized controlled trials (Jenkins et al., 2024) showed that while microfinance increased business activity (d = 0.38), its impact on poverty reduction varied substantially by context. In Ghana, longitudinal data from 2,300 Sinapi Aba Trust beneficiaries (Owusu et al., 2023) demonstrated that successful poverty reduction (defined as sustained income above national poverty line) was significantly associated with complementary business development services (OR = 1.89, 95% CI: 1.45-2.33).

Recent econometric analyses provide insights into CSO-community relationships. Using panel data from 15,000 households across Uganda (2000-2022), Harrison and Mbeki (2024) found that CSO presence explained only 14.3% of variance in poverty reduction outcomes (adjusted R² = 0.143). Their structural equation modeling revealed that community engagement quality mediated this relationship significantly (β = 0.56, p < .001), suggesting that mere CSO presence insufficient for impact.

The evidence base for CSO effectiveness in sustainable income generation necessitates theoretical and methodological reconsideration. A global meta-analysis of 1,234 poverty reduction initiatives (Zhang et al., 2024) identified key success factors: market integration (OR = 2.45), skills-based training (OR = 2.12), and community co-design (OR = 1.98). These findings suggest that while CSOs maintain their position as crucial development actors, their impact depends heavily on program design and implementation quality.

This empirical evidence presents a compelling argument for reconceptualizing CSO approaches to poverty reduction. Recent data from 18 countries (World Bank, 2024) indicates that successful poverty reduction initiatives increasingly rely on integrated approaches combining income generation with capacity building (r = 0.67, p < .001). Such evidence-based evolution in approach may better position CSOs to fulfill their theoretical potential as agents of positive social change within complex development landscapes.

STUDY METHODS

The study employed a descriptive research design to collect and analyze data from a target population of 320 participants, including 20 WACSOF staff and 300 beneficiaries (comprising 50 women sensitized about human rights, 50 parents of supported pupils, and 200 individuals involved in income generation activities). Using Slovin’s formula (n=N/1+N(e²)), a sample size of 178 respondents was determined, with stratified random sampling used for WACSOF staff and simple random sampling for beneficiaries. Data collection utilized both questionnaires (featuring closed-ended questions for easy coding and analysis) and semi-structured interview guides for face-to-face interviews, with instrument validity confirmed through content validity index (CVI=0.84) and reliability verified using Cronbach’s alpha coefficient (0.932), both exceeding the threshold of 0.7 to ensure data quality and consistency.

Response Rate

Initially, the researcher planned to collect data from 178 respondents that were 170 respondents for the questionnaire survey and 8 respondents for interviews. However complete data for the questionnaire was collected from 155 respondents and 5 respondents turned up for interviews. Hence finally data was collected from 160 respondents and the overall response rate for both questionnaire survey and interviews was 160 (89.9%). This response rate was sufficient because Mellahi and Harris (2016) indicated that a response rate of 50% above is enough in humanity studies.

Demographic Characteristics of Respondents

This section presents facts about the students, namely; gender, age, marital status and education levels. The data on the background characteristics of students is given in Table 1.

Table 4.1: Bio data of the respondents

Source, Field data 2023

The results on gender category showed that the larger percentage (55.8%) was of males with females being 44.2%. This suggested that the higher percentage of the respondents were males. However, views were representative of both gender groups because the difference between both groups was small, that is 5.8%. With respect to age groups of the respondents in years, the results revealed that (22.1%) of the respondents were between 18-30 years followed by 45.3% that were of years between 31-45 years and 18.9% were 46-60 years. Only 13.7% was above 60 years. These results show that respondents of different age groups participated in the study. Therefore, the views presented captured the perceptions of respondents of various age groups hence providing data that could be generalized.

The results on marital status category showed that the larger percentage (47.4%) was married with singles being 27.4% whiles 14.7 % were widowed and 10.5% divorced. This suggested that the higher percentage of the respondents were married. However, views were representative of all marital status because the difference between all groups was small. With respect to education levels, of the respondents, the results revealed that the larger percentage (36.8%) was of the respondents were bachelor holders followed by 28.4% that were at tertiary level, 16.8% of them finished secondary level, 11.6% finished primary level and only 6.3% had masters and above. These results show that respondents of respondents of different education levels participated in the study. Therefore, the views presented captured the perceptions of respondents of various education levels hence providing data that could be generalized.

Income Generation Sensitization Services and Community Development

Income generation sensitization services which is the second aspect of civil society organizations services was studied using seven items. The results were as presented in Table 2

Table 2: Descriptive statistics on income generation sensitization services

Source: Primary Data, 2023

The results in Table 4.3 about whether WACSOF offers useful information on gainful economic activities in Bushenyi district, cumulatively the majority percentage (83.1%) of the respondents agreed while 16.9% disagreed and with a mean equal to 4.19 which on the scale used corresponded with agreement, the results suggested WACSOF offers useful information on gainful economic activities in Bushenyi district which in turn promotes community development. The findings also revealed WACSOF has provided gainful employment to people in Bushenyi area to improve their incomes because the majority percentage (84.6%) of the respondents agreed with the statement, while 15.4% disagreed with the statement and the results were confirmed by a mean equal to 3.68 which corresponds with the agreement on the Likert scale. Also, with the majority percentage (82.1%) of the respondents agreeing and the high mean equal to 3.73, the findings suggested that WACSOF interventions have promoted entrepreneurial development in Bushenyi district, while 13.7% of them disagreed and 4.2% of the respondents were neutral. This implies that WACSOF interventions have promoted entrepreneurial development in Bushenyi through sensitizing people on income generating activities. The findings further indicated that the Support people receive from WACSOF has uplifted their income source because the majority percentage (78.6%) agreed that the statement and this was supported by the high mean equal to 3.75.

The results in Table 4.5 about whether WACSOF interventions have contributed to community development in Bushenyi district, cumulatively the majority percentage (92.3%) of the respondents agreed while 7.7% disagreed and with the high mean equal to 3.89 close to code 4 which on the scale used corresponded with agreement, the results suggested that WACSOF interventions have contributed to community development in Bushenyi. The findings also revealed that WACSOF renders services by guiding people to access credit in order to boost their income generation promote community development because the majority percentage (84.6%) of the respondents agreed with the statement, while 15.4% disagreed with the statement and the results were confirmed by the low mean equal to 3.68 which corresponds with the agreement on the Likert scale. Also, with the majority percentage (74%) of the respondents agreeing and the high mean equal to 4.33, the findings suggested that WACSOF offers financial literacy to people in Bushenyi district, while 22.9% of them disagreed and 3.1% of the respondents were neutral. This implies that Income generation services offered by WACSOF promote community development in Bushenyi district.

During interviews with WASOF managers, they were asked to tell whether sensitization on income generating services offered by WACSOF promote community development? To this question, one manager said,

“I am impressed with the income generation sensitization programmes offered by WACSOF because a number of people have picked interest in working towards achieving better income generating activities which in turn promote community development.

This implies that income generation sensitization services offered by WACSOF promote community development in Bushenyi district.

Table 3: Regression Results

Source: Primary Data 2023

The results in Table 4.7 show that the components of civil society organization’s services , namely; education services, income generation sensitization and respect for human rights explained 55% of the variation in community development (R2= 0.55). This means that 45% of the variation in community development in Bushenyi district was accounted for by other factors not considered under this model and a unit change in civil society organization’s services causes 46% change in community development in Bushenyi district (adjusted R2= 0.46). All the three components of civil society organizations services, namely; education services (β = 0.405, p = 0.000 < 0.05), income generation sensitization (β = 0.413, p = 0.000 < 0.05) and respect for human rights (β = 0.141, p = 0.001 < 0.005) had a positive and significant influence on community development in Bushenyi district. This means that the null Hypotheses One, Two and Three (HO1, HO2& HO3) were rejected. The magnitudes of the respective betas suggested that education services had the most significant influence on community development.

DISCUSSION

Sensitization on Income generation and community development

Findings from the study showed that sensitization on Income generation services has a strong, positive and significant relationship with community development as shown by (r = 0.76**, p = 0.000 < 0.05). This means that sensitization on income generating activities move in the save direction with community development and any increment in income generation leads to improvement in community development by 0.76%. These findings are in agreement with those that found out that Civil Society organizations involvement in poverty reduction programmes and the new aid framework is considered of great important because they are considered one of the key players in poverty reduction. Civil Society organizations impact on lives of the poor, policy and practice can be regarded as insufficient generally, though some progressive success has been achieved in NGO participation in official poverty reduction programmes (Hearn, 2020). One of the lead forces in the world in combating poverty in the world is the Civil Society organizations activities and developmental efforts (Willetts, 2002; Suharko, 2007; Lewis & Kanji, 2009; Adjei Osei-Wusu, et al., 2012; Banks, et al., 2015). Poverty reduction has been achieved as a result of tangible growth in the capacities of Civil Society organizations to reach and respond to the needs of the minority in the society. Also these findings match with those that found out that some of the approaches to poverty reduction employed by Civil Society organizations include assets based approach’ (Sparr& Moser, 2007); macro and micro level/supply-side and demand-side approaches (Suharko, 2007); and participatory, people centered rights based approaches (Banks & Hulme, 2012). The Civil Society organizations operations with these approaches requires basic service provision, microfinance, pro-poor growth, asset accumulation, advocacy strategies and income generating projects. All these activities are aimed at promoting sustainable livelihoods among the poor. For some years now the project of income generation has been slated and argued that such project rarely brings in a substantial return to their participants, and if the worth of aids and labor is to be accounted for, it is scarce to find that the profit is more than the actual expenditure.

Further still the study findings are matching with those of Voice (1987) who conducted a study on income generation on Zimbabwe Civil Society organizations with which the income generation project (IGP) assessment came out negative, therefore this clarifies that the IGP event of Civil Society organizations in Zimbabwe had a slight impact on income generation but no influence on employment generation (Voice, 1987:6). This outcome corresponds with the achievement level of income generation project achieved during this research, indicating ineffective project on several instances. For example, people have resources to generate income but lack what and how to manage them, for instance a poultry with birds/chick lacking finance to feed them, another group manufacture products but couldn’t sell them and some with garden but could not sustain their garden due to drought (Lewis,2019). In about thirteen projects linked with income and expenditure process, nine of the participants recounted initially that they had an encouraging outcome, but five out these nine when further interrogated, later declared that their outcome was actually less than the cost they had put into the project. For example, a poultry project having a less return compare to what they had spent on feed was considered successful because the participants were able to sell all their chickens without considering the cost of purchase of the chicks incurred by the NGO who supplied them. In actual fact, it was only four projects out of the nine reported to be successful provided a net positive income to the participants (Summers, 2021).

Sensitization on Income Generation and Community Development

Findings from the study showed that sensitization on Income generation services has a strong, positive and significant relationship with community development as shown by (r = 0.76**, p = 0.000 < 0.05). This means that sensitization on income generating activities move in the save direction with community development and any increment in income generation leads to improvement in community development by 0.76%. It can be concluded that income generation contributes greatly to community development and therefore WACSOF should keep up the sensitization drive to help uplift the lives of many people and promote community development in Bushenyi district.

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