This study was undertaken to identify credit constrained status of households and analyse the determinants of credit constraints in the Afigya-Kwabre District of Ghana. A multistage random sampling was used to select 166 households which comprised of 94 credit constrained households and 72 credit unconstrained households. A semi-structured questionnaire was used to elicit primary data from the respondents. The Direct Elicitation Method (DEM) was used to identify credit constrained household whilst binary logit was uused to determine households that were likely to be credit constrained. Results revealed that 57% of the households were credit constrained. Also, the results of the logit showed that sex, age, farm experience, farm size, years of formal education, household size, extension contact and distance were the major factors which significantly determine the credit constraint status of the households. In order to address the credit constrained status of the households, it is recommended that educational programs be organized by government for the households since more years of education reduces credit constraint. Credit lenders should strategically site their institutions close to the rural communities (households) to increase household credit access and reduce transaction cost. Extension workers must educate households on how they could be creditworthy to lending institutions.
IMPACT OF MICRO-CREDIT ON POVERTY ALLEVIATION IN NIGERIA – THE CASE OF ENUGU EAST LOCAL COUNCIL (Published)
Poverty has remained a global phenomenon and has defied various attempts at curbing it especially in developing countries. The high and unacceptable number of people within its grip around the world gave it a pride of place as one of the major goals of Millennium Development Goals (MDGs) adopted in 2000. Poverty alleviation was a prime target of the MDGs and micro-credit was recognized as a veritable tool for tackling it. In this paper, we examined empirically the effect of micro-credit on poverty alleviation in Nigeria using some selected rural farm households in Enugu East Local Government of Nigeria. To achieve this, primary data were collected on the sources and access to micro credit; the incidence, depth and severity of poverty among the selected rural households. Appropriate descriptive and analytical tools were employed to process the data obtained. The results of the study show that poverty level is still high among the rural populace; but those that have access to micro-credit seems to have fared better than those who have no access to micro-credit. In other words, access to micro-credit has positive but not significant impact on poverty alleviation among the rural populace. The study recommends that government should intensify effort in its recent financial inclusion strategy to ensure that the rural populace has greater access to micro credits. Government should also ensure that interest rate on micro credits are affordable, the terms of the credits flexible and the conditions attached to the credit well liberalized