Effect of Lift Above Poverty Organization (LAPO) microcredit on the economic performance of cassava farmers in Edo State Nigeria

Abstract

The study examined the effect of Lift above Poverty Orgnization (LAPO) microcredit on economic performance of cassava farmers in Edo State. Profitability indices (gross margin, net profit, land productivity, labour productivity and returns on investment) were compared between cassava farmers who were users of LAPO microcredit (Treatment) and non-users (Control). To get the Treatment, 93 users of microcredit were selected using simple random sampling from the list of cassava farmers obtained from LAPO Microfinance Bank. The second group – the Control (93) were selected from identified non-users of microcredit using simple random sampling giving a total sample size of 186. Farm Budgetary analysis was carried out to assess the economic performance of respondents. Analysis of results showed that both groups had similar socioeconomic characteristics with mean household size of seven; mean ages of non-users and users of microcredit were 48 and 45 years respectively; farming experience was 21 and 19 years respectively; and both groups cultivated less than two hectares showing they were operating on a small scale. Results indicated that respectively, non-users and users had net profit of N59, 071 and N40, 388 per hectare; land productivity of 12.03 tons/ha and 12.61 tons/ha and labour productivity of 86kg/man-day and 94 kg/man-day. The t statistic showed that there were no significant differences in all these variables between the Treatment and Control. For the desired benefits of accessing microcredit to be more pronounced in cassava production, farmers should seek more ways to empower themselves by forming cooperatives so that they can pool resources together and embrace mechanization which can help