Effects of Microcredit Facilities on the Welfare of Households. Evidence from 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 used 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. 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 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.

Key Words: Microcredit, Welfare,