Impact of credit utilisation on poverty reduction among farm households in some selected Local Government Areas of Kwara State, Nigeria

Abstract

This study examined the effect of credit utilisation on poverty reduction of a representative sample of 240 farm households in some selected Local Government Areas of Kwara State using descriptive statistics and logistic regression analysis. The results of the descriptive statistics show that 86% of the heads of the farm households were male and 54% had no formal education. The results further show that 44% of the households utilised credit facilities and 35% belongs to cooperative societies. The results of the living condition characteristics show that 61% of the households used open spaces for faeces disposal and 70% used fuel wood for cooking. With an estimated poverty benchmark of N3122.49 per capita per month, 53% of the farm households were poor and only 4% were core poor. With two dollars a day per capita benchmark however at N200 per dollar exchange rate and a poverty line of N12,000 per capita per month, 96% of the farm households were poor and only 34% were from households with credit utilisation. The identified factors influencing poverty status for all households (the pooled data) in the study area include: marital status and years of schooling of the household heads, membership of cooperative societies, amount of credit utilised and household size. The significant factors influencing the poverty status of households with credit utilisation in the study area are: years of schooling, cooperative membership, farm and household size. The following variables however significantly influenced the poverty status of households without credit utilisation: marital status, cooperative membership, farm and household size. The study recommends membership of cooperative society as a tool for accessing cheap and unencumbered credit facilities and for access to other farm inputs. Increased farm size and years of schooling can also result in higher level of welfare for the farm households in the study area.