effects of microcredit facilities on the welfare of households in suna east sub-county, migori county kenya

Abstract

The socio-economic growth and development of Migori County is to a great extent dependent on farming and small scale enterprise. Majority of the people working in these sectors are low income earners whose main source of credit facilities is the micro lending institutions. The aim of the present study was to analyse the effects of microcredit facilities on the welfare of households in Suna East Sub-County. The study focussed on the microcredit customers who got loan from the five selected microfinance institutions in Suna East Sub-County. A sample size of 306 respondents was obtained for the study using Krajcie & Morgans' table,1970. A survey was conducted to carry out the study in which questionnaires was developed to collect data from the respondents. Multiple regression analysis was used to test the proposed hypotheses of the study and to verify the association between variables. The results of the multiple regression analysis test revealed that there was a significant effect of microcredit in improving household's welfare status and living standard of the microcredit users in the Sub-County. Both descriptive and inferential statistics were used to draw the results from the study. Through descriptive analysis, the study clearly demonstrated that microcredit has played a positive role in improving the household status of customers after getting the loan. In this regard the study observed that microcredit played the positive role in changing and improving the living standards, income, diet patterns, health status and children's education of the respondents. The current study did not put into consideration the effect of respondents background characteristics on household welfare. The study recommends that emphasis on the importance of loan services on household welfare should be made and the amounts borrowed be increased so as to meet the needs of the residents, residents should be encouraged to save with the microcredit facilities so as to raise their chances of gaining support from the facilities and lastly capacity building among households should be maintained so that residents can maximize potentials within the microcredit facilities.