ANALYSIS OF MICROFINANCE AND ITS EFFECT ON HOUSEHOLD INCOME (A case study of smallholder farmers in Chitipi EPA, Lilongwe District (original) (raw)
Related papers
Effectiveness of Micro Financing For Poverty Alleviation
2019
Article History Received: 01.11.2018 Accepted: 07.11.2018 Published: 30.11.2018 Abstract: Poverty is a serious issue which is faced by masses around the world. This study aims to determine whether the microfinance institutions established for the purpose of reduction of poverty have been successful in achieving their objective or not. Primary data was collected for the proposed research study through structured questionnaires. In order to analyze the collected data multiple liner regression and paired t-test were applied. Outcomes illustration that microfinance has a durable positive effect on children education and enterprise financial performance. Though, there is varied indication found on food security, household expenses and household assets. No effect has been detected on housing and income smoothening of enterprise. Among other independent variables, it was exposed that number of salaried persons was originate to be very important variable contributing to the wellbeing of the...
The impact of microfinance programs on monetary poverty reduction
World Journal of Entrepreneurship, Management and Sustainable Development, 2019
Purpose The purpose of this paper is to examine the impact of microfinance programs sponsored by Sudanese microfinance institutions (SMFIs) on monetary poverty reduction in Sudan where poverty is widely spread. Design/methodology/approach The study adopted the control group approach, where income and expenditure are taken as welfare indicators. The updated World Bank’s international poverty line of 1.90 per person per day was adopted to separate the poor from non-poor. The data were collected by the means of a questionnaire distributed to a random sample of beneficiaries in the institution under study. The study adapted the Foster, Greer and Thorbecke (FGT) model to evaluate the role of microfinance programs in poverty reduction. Furthermore, to gain more insight into the impact of the program, a preliminary analysis was conducted using the independent-samples t-test to examine the difference in the welfare indicators for the sample of the control group and treatment group as well a...
Journal of Economics and Sustainable Development, 2020
In a subsistence agriculture and low income countries like Ethiopia, where rural households dominate the overall national economy, who are facing with shortage of financial resources not only to purchase productive agricultural inputs but they also need to participate in income generating activities. Since 1996 Microfinance institutions have made significant assistance to the livelihoods of many people through the provision of financial and supporting services to the poor, especially low income households in rural environments. This study was conducted to assess the determinants of rural household participation in microfinance program and its impact on their income and asset building in Sodo Woreda. Both primary and secondary data were used for the study. Multi-stage stratified sampling technique employed. Primary data were collected from a total of 190 rural households of which 80 were participants and 110 were non-participants in microfinance programs using systematic and simple random sampling technique. Descriptive statistics and econometric model were used for analyzing the data. Descriptive and test statistic were computed to describe demographic, socioeconomic and institutional characteristics and living condition. A propensity score matching method was employed to analyze determinants of rural households' participation in microfinance program and its impact on income and asset holding of participant households. The result of the descriptive statistics indicate that participants were Participant groups were better off agricultural input usage, clothing status of adult members of the household, annual income earning, amount and quality of food consumed during last five years, total expenditures and total livestock holding. The result of the propensity score revealed that family size, level of education and frequency of extension contact significantly and positively influenced the participation of rural households in microfinance program whereas number of dependent members, application procedure for credit, perception on risk of borrowing and distance of household's residence from office of Omo Microfinance Institution had significantly and negatively influenced the participation of rural households in microfinance program. The average treatment effect on the treated showed that program participant households earned an average income of 2716.68 Birr and had an average total value of non-livestock asset of 3079.38 Birr and 2.46 TLU of livestock which were significantly greater than that of non-participants. Similarly, the result of descriptive statistics revealed that participants were better off in earning total income, amount, and quality of food consumption and clothing status of adult member of households as compared to non-participants. Therefore, Omo Microfinance Institution and other concerned stakeholders should expand access of microfinance program to rural households in livelihood enhancement and poverty reduction endeavors.
Microfinance and its Role in Household Poverty Reduction: Findings from Pakistan
SSRN Electronic Journal, 2000
Katsus Brook ISBN : ersity of Ma @bcs.org.uk esponding ersity of Ba i@bath.ac.u ersity of Ma Kobe Unive shi.imai@m ks World Po : 978-1-907 anchester, k author ath, UK uk anchester, ersity, Japa manchester. overty Insti 7247-72-9 UK UK and an .ac.uk itute Micro A Is K J B Creat ofinance reduct Asad K. G ssam Ma Katsushi June 201 BWPI Wo ting and sh ww e and its tion: find Ghalib 1* alki 2 S. Imai 3 2 orking Pa haring know ww.manche role in h dings from 3 aper 173 wledge to h ester.ac.uk/ househol m Pakist help end po /bwpi ld povert tan overty ty Abstract
Assessing the Effect of Microfinance on Vulnerability and Poverty among Low Income Households
Journal of Development Studies, 2012
We empirically investigate whether participation in Indian Self Help Group microfinance program (SHG) has helped reduced poverty and household vulnerability using cross-sectional SHG rural household survey data. The potential selection bias is eliminated by propensity score matching to estimate the average treatment on treated effect using nearest neighbour matching and local linear regression algorithm. We find that vulnerability in SHG members is not significantly higher than the non-SHG members, even though the SHG members have a high incidence of poverty. However, vulnerability declines significantly for those that have been SHG members for more than one year. These results are found to be robust using sensitivity analysis and Rosenbaum bounds method.
Microfinance aimed at breaking the vicious circle of poverty in Ethiopia mainly by providing loan service for rural households. The main objective of this study is to examine the impact of microfinance loan service on multidimensional poverty status of rural households by taking evidence from Amhara Credit and Saving Association. To attain this objective, the researchers collect primary data by using household survey from the total of 290 sample sizes 145 from treated group and 145 from non treated group respondents by using quasi experimental design. To analyze the data, the resrahcers employed descriptive statistics and inferential statics. The propensity score matching model result reveled that microfinance loan service has a negatively impact on the multidimensional poverty status of rural households. It is also found that microfinance loan service has reduced standard of living, health and educational dimensions of poverty respectively for rural households of the study area. It is recommended that government should give special attention to support microfinance's who support the rural poor household heads and improve the awareness level of farmers about its role towards poverty reduction .
Addressing poverty through microfinance: does it work
Pressacademia, 2018
Purpose-For the couple of decades microfinance has remained nucleus of developing nations to combat poverty. This paper aims to examine whether microfinance succeeded to reduce poverty? In this study poverty has been taken as analogous to 'extreme poverty'. Methodology-Influence of microfinance in poverty eradication is investigated by comparing clients in first loan cycle with the clients of higher loan cycles. The data was analyzed in two ways; firstly, simple and straight forward descriptive analysis with simple univariate technique and secondly, empirical analysis is made by using binary logit model. Findings-It is found that intermediation of microfinance did not only raise the income of borrowers but also lifted their spending over the loan cycles. The study also explores that over the successive loan cycles, possession of household durable item, spending on education, respond to the shocks and health status also improved. Clients in higher loan cycles managed to improve their social status. Conclusion-Almost every examined poverty indicator indicates positive impact of microfinance on poverty eradication. However, various colors of poverty in the society do not allow us to cultimate the effectiveness of microfinance in poverty eradication.