ABSTRACT

This study evaluated the effect of microcredit and gender related variables on welfare of smallholder cassava- based producing households in Abia state, Nigeria. Primary data were collected from smallholder cassava- based producers who were registered with the ADP from 2014 –2019. A multistage sampling technique involving purposive and random sampling technique were used in the selection of 240 respondents comprising of 80 microcredit user households (40 males and 40 females) and 160 microcredit non user households (80 males and 80 females). `Analytical tools used were descriptive statistics, welfare index, Ordinary Least Squares multiple regression analysis, Chow test and paired Z-test. Results on socio economic characteristics showed that the mean age of the producers were 51 and 48 years and (81.67% and 68.33%) were married for the male and female household heads respectively. They had up to 14 years farming experience and about 80 % attended at least primary school for the male and female household heads. Mean household size of 6 persons, mean farm sizes of 2.13 and 1.67 hectares, mean income of ₦365,548 and ₦317,273 were gotten for the male and female headed households respectively. The mean amount of credit received by the male headed household was ₦150,875 and that of the female headed household was ₦115,530. The mean output of the male headed household was 19.42 tonnes/hectare while that of the female headed household was 12.05 tonnes/hectare. The results of the welfare status showed that the male credit users and non-credit user households had more non poor people as compared to the female headed credit user and non-credit user households. The results of Ordinary Least Squares multiple regression analysis model showed that amount of credit received and household size significantly affected welfare at 5 percent while loan duration, interest payment on loan, farm size and income significantly affected the welfare of the male cassava producing households at 1 percent. Also, amount of credit significantly affected welfare at 5 percent while loan duration, interest payment on loan, value of land used as collateral, household size and income were significant factors that affected the welfare of the female cassava producing households at 1 percent. Results on welfare function showed that age, household size, size of land holding, age composition, income and cost of production were the factors that influenced the welfare of the microcredit user households while age, education, size of land holding, composition of members that are working, income and cost of production were the factors that influenced the welfare of the non-microcredit user households. The Chow test showed that the male headed credit user households and the male headed non-credit user households had a higher profitability than the female headed credit user households and the female headed non-credit user households. The Z-test results showed that the male headed cassava producing households had more output, income and profit than the female headed cassava producing households. It was recommended that government incentives in encouraging favourable lending conditions should be encouraged and sustained and policies/programmes that encourage gender equality should be put in place to encourage the entrepreneurs to harness and optimize use of credit borrowed to make more profit and improve their welfare.

TABLE OF CONTENTS

Title Page                                                                                                                    i

Declaration                                                                                                                  ii

Certification                                                                                                                iii                                                                                                         

Dedication                                                                                                                  iv        

Acknowledgements                                                                                                    v                                                                                                       

Table of Contents                                                                                                       vi                                                                                                

List of Tables                                                                                                              ix                                                                                                    

List of Figures                                                                                                             xi

Abstract                                                                                                                                 

CHAPTER 1: INTRODUCTION

1.1              Background Information                                                                                1

1.2              Problem Statement                                                                                          8

1.3              Objectives of the Study                                                                                  10

1.4              Hypotheses of the Study                                                                                11

1.5       Justification of the Study                                                                               11

CHAPTER 2: LITERATURE REVIEW 

  2.1     Conceptual Literature                                                                                     13

2.1.1    Concept of microcredit                                                                                   13

2.1.2    Concept of microcredit related variables                                                        14

2.1.3    Sources of credit to agro enterprises                                                               19

2.1.4    Conditions for extending credits to customers                                               20

2.1.5    Concept of gender                                                                                          21

2.1.6    Concept of gender related variables                                                               22

2.1.7    Concept of household welfare                                                                        26

2.1.8    Measurement of household welfare                                                                28

2.1.9    Household characteristics                                                                               30

2.1.10  Smallholder producers                                                                                    32

2.1.11  Concept of profitability                                                                                  33

2.1.12  Cassava production in Nigeria                                                                        34

2.2       Theoretical Literature                                                                                      39

2.2.1    Theories of gender                                                                                          39

2.2.2    Theories microcredit related variables                                                40

2.2.3    Theories of welfare                                                                                         42

2.3       Empirical Literature                                                                                        44

2.3.1    Empirical review of related studies on gender related variables                    44

2.3.2    Empirical review of related studies on microcredit related

on welfare                                                                                                       47

2.3.3    Studies on socioeconomic determinants of household welfare                      51

2.4       Analytical Framework                                                                        55

2.4.1    Socioeconomic characteristics of respondents                                                55

2.4.2    Estimation of welfare index of smallholder cassava producers                      55

2.4.3    Regression models                                                                                          56

2.4.4    Estimation of welfare function                                                                       57

2.4.5    Estimation of profitability                                                                              57

2.4.6   Z-test model                                                                                                    58

CHAPTER 3:  METHODOLOGY

3.1       Study Area                                                                                                      59

3.2       Sampling Procedure                                                                                        62

3.3       Data Collection                                                                                               64

3.4       Analytical Procedure                                                                                      64

3.4.1    Test for change in welfare                                                                              67

3.4.2    Test for homogeneity of slopes for welfare                                                    68

3.4.3    Test for differences in interest for credit                                                        68

3.4.4    Comparison of profitability of male and female beneficiaries                        69

3.4.5    Test for structural shift in profitability                                                           69

3.4.6    Test for homogeneity  of slopes for profitability                                            70

3.4.7    Test for differences in intercepts for profitability                                          70

3.4.8    Test of hypotheses on gender variables affecting welfare                              70

CHAPTER 4: RESULTS AND DISCUSSION

4.1       Socioeconomic and Demographic Characteristics of the Producers              72

4.2       Effect of Microcredit Related Variables that affect the Welfare of Male                               Credit user Households                                                                             102

4.2.1    Microcredit Related Variables that affect the Welfare of Female                 106

              Credit user Households

4.2.2    Welfare of the Microcredit User and Non-User Households                         109

4.2.3    Tests for structural shift in welfare function and difference in

welfare                                                                                                                        115

4.2.4    Effect of Gender Related Variables Affecting Welfare of Respondents      117

4.3     Comparison of Welfare Status by Gender                                                        124

4.4       Profitability of Microcredit User and Credit Non user Households by

            Gender                                                                                                                        127

4.4.1    Profitability of credit user households by gender                                           128

4.4.2    Tests for structural shift in profitability and differences in                           

            profitability of credit user households by gender                                           134

4.5 Factors Affecting the Welfare of Cassava Producing Households by

            Gender                                                                                                                        136

4.5.1    Tests for structural shift in welfare function and difference in

             Welfare of microcredit user households                                                        142

CHAPTER 5: SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1       Summary                                                                                                         144

5.2       Conclusion                                                                                                      146

5.3       Recommendations                                                                                          147

References                                                                                                                  150

Appendix                                                                                                                    164

LIST OF TABLES

3.1       Sample size and sampling frame                                                                     63

4.1       Distribution of the respondents based on age                                                73

4.2       Distribution of the respondents based on marital status                                 75       

4.3       Distribution of the respondents based on education                                      77

4.4       Distribution of the respondents based on household size                              79

4.5       Distribution of the respondents based on farming experience                       81

4.6       Distribution of the respondents based on farm size                                       83

4.7       Distribution of the respondents based on membership of cooperation          85

4.8       Distribution of the respondents based on other crops planted                       87

4.9       Distribution of the respondents based on sources of farm land                     89

4.10     Distribution of the respondents based on amount of credit received             91

4.11     Distribution of the respondents based on farm income                                  93

4.12     Distribution of the respondents based on output                                           95

4.13     Distribution of the respondents based on sources of finance                         97

4.14      Distribution of the respondents based on problems encountered in farming            99

4.15     Test for differences in major Socio economic variables of the male             

 and female cassava based producing households                                          101

4.16     Effect of microcredit related variables that affect the welfare of the                       

             male credit user cassava based producing households                                  102

4.17     Effect of microcredit related variables that affect the welfare of the

female credit user cassava based producing households                                106

4.18     Estimated welfare function of the male credit user and male non-credit

 user households                                                                                              110

4.19     Tests for differences in welfare for user and credit non user

households                                                                                                      116

4.20     Paired Z-test to compare the gender related variables outcomes affecting the

welfare of the male and female cassava based producing households           118

4.21      Distribution of cassava producing households according to their welfare

              Status                                                                                                                        124

4.22     Profitability and returns on investment of credit user and credit non user

             households by gender                                                                                    127

4.23      Profitability of credit user households by gender                                          129                                                                                                     

4.24     Tests for differences in profitability of microcredit user households by

 gender                                                                                                                        134     

4.25     Estimated welfare functions of microcredit user households by

             Gender                                                                                                           137                                         

4.26     Tests for differences in welfare of male and female credit user

            Households                                                                                                     142

LIST OF FIGURES

Fig 2.1             Estimates of root yield and total output for cassava in Nigeria

during 1999 – 2018.                                                                            38

Fig 3.1             Map showing Abia State Local Government Areas and the Selected

Communities for the study                                                                 61