Scientific Papers Series : Management, Economic Engineering in Agriculture and Rural Development (Mar 2014)
LOCAL INSTITUTIONS’ MICRO CREDIT DELIVERY AND EFFECTS ON RURAL FARM HOUSEHOLDS’ POVERTY IN ABIA STATE, NIGERIA
Abstract
The study examined the effect of local institutions’ micro credit delivery on rural farm household poverty status in Abia state, Nigeria. Multistage random sampling technique was employed in collecting data from two hundred and four (204) rural farm households in local institutions using structured interview schedule. The data were analyzed using descriptive statistics, poverty indices, and paired t-test. The study revealed reveals that the religious association granted the highest amount of credit (N91,950.0) to their members more than any other local institutions in the study area, while the mean amount demanded was N 128,491.3. The average annual contribution of members in different local association was N36357.35 with a low percentage cash contribution index of 10.59%. The result of the poverty indicators of the rural farm households in local institutions showed that the poverty line (mean monthly household expenditure) of the farm households was N16 N20648.94 per month or N 247787.28 per annum. The incidence of poverty otherwise called the head count ratio was 0.4863 while the coefficient of poverty gap (poverty depth) was 0.2458. The result of the paired t-test showed that the local institutions’ micro credits impacted significantly on the mean annual farm income and monthly expenditures of the rural farm households in the study area. It was however, recommended that the autonomous local institutions should be integrated into the current poverty alleviation programme of the government and making them channels for loan delivery with a view to strengthening the financial capacity of its members as well as achieving the Millennium development goals of reducing poverty by half.
