Comparative profitability analysis of microfinance credit and non-credit beneficiaries in north eastern, Nigeria

Abstract

This study investigated the effect of microfinance on improving the profit level of credit beneficiaries (CB) and compares it with non-credit beneficiaries (NCB) in North-Eastern Nigeria. Descriptive statistics, gross margin and t-test were used to analyze the data. The results of both groups showed that male mostly undertake maize production activities in the area as they are educated, experienced and are in their most productive ages. The total revenue accrued to CB per cropping season was N197,100, with a gross margin of about N104,123.55 and net farm income of N95,834.40, while NCB realized a total revenue of only N108,602.10, the gross margin of N53,961.60 and a net farm income of N50,724.05 which indicates that maize farming was generally profitable in the study area. The t-test results showed that there is a significant difference between the production inputs used, maize yield and profit gained by CB and NCB at varying levels of probability. The study recommends that microfinance beneficiaries should increase their loan size to invest more in their production activities and NCB should be encourage to obtain loan in order to complement their income and enhance their yield and profit levels.