ABSTRACT

The finance debacle must be tackled if the productivity problem facing agricultural development in under developed countries such as Nigeria is to be solved. This, in essence, implies that micro credit must be made more operational and effective in these countries since the bulk of the farmers are rural based small scale agriculturalists that lack access to the regular institutional sources of finance. This study thus examined the effect of microcredit on household food poverty status in Enugu State, Nigeria. The specific objectives were to determine the socioeconomic characteristics of rural farming household, to access the poverty status of the respondents, evaluate the factor influencing poverty status of the respondent, determine the source of micro-credit and identify the problems of securing microcredit by the respondent. A multistage random sampling technique was adopted to select 60 household heads which represent the sample size. A well structured questionnaire was used to collect information from the respondents. The data collected were analyzed using both descriptive such as percentage, mean and percentage and inferential statistics such the Tobit regression model. The results of the socio-economic characteristics revealed that majority (95.8%) of the farming household were within the age of 15-54 year. In term of sex there were more male than females in study. Majority (53.3%) of the farmer were married, which indicate more stable household. An overwhelming majority (96.7%) of the respondents have formal education. On average the farming household has spent about 14 years in farming. The Farmers in the study area have the mean household size of 4 persons. The result also shows that overwhelming majority farmers had had above 1.01 hectare of land under cultivation, the mean size of farmland cultivated is 1.5 ha. The average amount of credit was 62166.67. From the result obtain Majority (81.67%) of the households are non-poor while the rest (18.33%) are poor. The study used the Tobit regression model to analyze the Factors Influencing poverty status of respondent in the study area. Five of the variables examined had significant effects on the poverty status. These are coefficient of Sex (X1), Age (X2), Household size (X3), Credit (X5), and Income (X6) which were found to be significant at 1%, 5%, 10%, 5% and 5% respectively. The major constraint faced in accessing credit among others was burdensome collateral. The study recommends that special loan scheme which reduces administrative bureaucracy should be inaugurated in rural area through microfinance banks