EVALUATION OF MICRO-CREDIT PROGRAMME BY MICROFINANCE BANKS ON POVERTY ALLEVIATION IN NIGER STATE, NIGERIA

Abstract

ABSTRACT The study examines the effects of micro-credit on poverty alleviation among the rural households in Bosso Local Government Area of Niger State, Nigeria. Random sampling technique was used to identify 100 respondents; 43 participant of microcredit programme of Microfinance Banks (MFBs) and 47 non-participants. Data were obtained using structured questionnaires of which only 90 were found usable for the study. Data obtained were analyzed using descriptive statistics, FGT food poverty index and probit regression analysis. The result of the analyses revealed that users of microcredit have higher literacy level and a higher percentage of food expenditure to total expenditure ratio compared to the non-users of the scheme. The FGT food poverty index showed that the level of poverty among the non-users of the scheme was higher than the users. Also, a higher level of non-food poverty (severity index of 0.0195). the probit regression showed that the food poverty status of households was influenced by family size and economic status of the household head. Also, microcredit did not show a positive significant (P<0.01) effect on household food poverty status. It is therefore recommended that extension education and training of users of microcredit facility be encouraged; reasonable credit limit should be adopted, while households should be provided with enabling socio-economic environment such as access roads that could support income generating activities in the study area.