IMPACT OF MICROFINANCE ACTIVITIES ON HOUSEHOLD LIVELIHOOD IMPROVEMENT: CASE STUDY OF SMALL SCALE FARMERS IN BAMENDA II POLICE CREDIT UNION (BAPCCUL) CAMEROON
By: Oswel Nformi Njamnsi | Department of Business and Management Studies | Accounting and Finance
ABSTRACT
Microfinance has become very vital in local, national and global poverty alleviation debates. The popular assumption is that enabling poor households (especially farmers) access to credit and other financial services helps households begin micro entrepreneurship which would enable them improve their livelihood It is against this backdrop that this study sought to assess the impact of microfinance activities on household improvement: the case of selected small scale farmers who are members of Bamenda Police Credit Union, based in Bamenda II municipality (BAPCCU). Specifically, the study first examined the impact of microcredits, secondly, evaluated the impact of capacity building (training activities) and finally, examined the impact of group lending by BAPCCUL on livelihood improvement of small scale farmers in Bamenda II Municipality. The study adopted the sample of 97 small scale farmers selected using both the purposive and simple random methods. In order to meet up with the above objectives, primary data was gathered with the use of questionnaire administered to 97small scale farmers who had benefited from BAPCCUL activities. The responses from the questionnaire were analyzed using percentage frequency tables while a regression analysis was employed to validate the hypothesis. The findings revealed that microloans, capacity building and group lending have a significant impact on livelihood improvement in terms of living standards with an R2 value of 67% and secondly in terms of Education with an R2 value of 46% and lastly in terms of healthcare with and R2 value of 63% of small scale farmers in Bamenda II municipality. The study recommended among others, that microfinance institutions should encourage more of group lending to farmers. Also, more training programs should be organized to educate farmers on lending procedures, financial management and investment analysis. This will enable the farmers invest in income generating activities. It will also enable the farmers know how to properly manage their finances. This will be important to the microfinance institutions in that it will increase income security of the farmers thereby reducing the rate of loan default.
Key words: Microfinance Institutions, Microcredit, Capacity Building, Group Lending, Household Livelihood.