The effect of micro-credit on poverty reduction in Northeast Nigeria

• Main Author: Kaka, Emmanuel John
• Format: Thesis
• Language: English; English
• Published: 2017
• Subjects: HG Finance
• Online Access: http://etd.uum.edu.my/7299/
• Institution: Universiti Utara Malaysia

Micro-credit is a financial service offered to the poor to start an enterprise or to expand an existing one. Poverty is the inability of individual households to command sufficient resources to meet socially acceptable standard of living. Thus, this study sought to establish the effect of micro-credit on poverty reduction in Northeast Nigeria. The study employed an intensive research design over an extensive period of time, a 24- weekly visit, for a period of 6 months. The population for this study consisted of a sample of 87 respondents, which involved 53 beneficiaries of the Development Exchange Centre micro-credit institution and 34 non-beneficiaries in the Lere and Bombar districts in Bauchi state, Northeast Nigeria. Stratified random sampling was employed in selecting the respondents for the study. Qualitative and quantitative data were collected by the use of interview questionnaire and in-depth interview. The data was processed using Stata. Ordinary Least Square was used to determine whether a group of variables together could predict a given dependent variable, mean difference between the beneficiaries and non-beneficiaries was conducted to assess the real effect of micro-credit on business income and expenditure. The three independent variables (credit, savings and supervision) considered in this study were relevant and significant in explaining the effect of micro-credit on business income and expenditure. The study discovered that the mean analysis showed a highly significant difference in the mean value of the beneficiaries as compared to the non-beneficiaries on income and expenditure. The study concluded that micro-credit could increase income and expenditure and hence, reduce poverty among DEC micro-credit beneficiaries.