EFFECT OF MICROCREDIT ON FOOD SECURITY AMONG THE POOR HOUSEHOLDS IN RWANDA “CASE STUDY OF AB BANK, MUSANZE DISTRICT, NORTHERN PROVINCE”
Abstract
The mainstay of the Rwandan economy is agriculture. However, the amount invested in agriculture is insufficient to generate a return or meet the nation's food requirements. It is challenging for rural farmers to obtain financial services from commercial banks because of their limited financial capability. They can therefore obtain those services with the aid of microfinance. The focus of this study was on the effects of microcredit on the food security status of the poor rural household farmers in Musanze District. The main objective of this study was to evaluate the effects of microcredit on the food security status of the poor households in Musanze District. As specific objectives, this study determined the types of products and services related to food security offered by AB Bank Microfinance Institution, to assess the food security status of the rural household farmers, to determine the factors affecting the accessibility of microcredit by the rural household farmers and finally to assess the vulnerability of rural household farmers to food insecurity in Musanze district. A descriptive survey design was used to enable the researcher reach a bigger proportion of the population as well as studying various variables. Out of total population of 624 women and youth customers in the category of women group, individual women and individual youth who had taken credit and saved for more than two times with AB Bank in Musanze district, the researcher selected 240 as a sample size on stratified sampling technique based on the respondent’s proportion. Data was collected using self–administered questionnaires and analysed using Statistical package for Social Sciences software. The results of the study were analysed using descriptive and inferential statistics and the results were presented using tables and figures. The research findings showed that 113 representing 75.3 3% of the respondents were women and 37 which represent 24.67% of the respondents were Men. The study findings revealed that 10% and 6.7% of the study respondents divorced and separated respectfully. The study findings showed that 59.33% and 13.33% of the women respondents completed both primary and secondary education. The study findings revealed that the income level of the respondents is statistically significant and thus has high effect in influencing food security of the rural household farmers. The study findings also showed that the educational level of the poor rural household farmers is key in enhancing the food security status of the household farmers in the rural areas. The study findings and recommendations will help the Government to implement policies which can help in the agricultural production in order to improve food security both at national and house hold levels. It was therefore concluded that capacity building is key to the production of food as long as the appropriate training is duly offered and with consistent back up. It can therefore be concluded that any rural household farmer of any education level as long as their capacity for production is enhanced through training can effectively and efficiently contribute in production of food. The microfinance institutions have thereby been urged to be more flexible, reduce interest rates, increase the size of the loan and continuously train, supervise and monitor the progress of the projects of the customers. The study conclusively confirmed that microfinance plays a very big role in influencing the food security status of the poor rural household Farmers in the District. The above analysis of conclusions confirmed that there is a role that is played by microfinance in improving the food security condition of the poor household Farmers in Musanze District. The benefits that accrue to the poor household Farmers have been explicitly discussed and it is important to note that the study will provide one of the very first resource books for loan officers, policy makers and development workers in the field of microfinance in Musanze District.
Key Words: Economy, Agriculture, Microcredit, Food Security
CITATION: Wongo, G. T. L., & Twesige, D. (2022). Effect of microcredit on food security among the poor households in Rwanda “Case study of AB Bank, Musanze District, Northern Province”. The Strategic Journal of Business & Change Management, 9 (4), 1761 – 1782.
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DOI: http://dx.doi.org/10.61426/sjbcm.v9i4.2523
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