An assessment of the contribution of microcredit to household welfare improvement in Kayunga District
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The study assessed the contribution of micro-credit in enhancing the welfare of households in Kayunga district. Three objectives guided the study and these were; to assess the contribution of microcredit on child education in Kayunga district, to examine the relationship between access to micro-credit and household health in Kayunga district and to explore the contribution of microcredit on household food security in Kayunga district. Both participants and non-participants in micro-credit programs were involved in the study and changes in their household’s wellbeing observed and comparisons made to make conclusions. The study adopted a cross-sectional research design and employed both qualitative and quantitative research methods. Data was collected using both qualitative and quantitative methods at a single point in time. Data was collected from 240 study participants of which 120 were micro-credit participants and another 120 were non-participants in micro-credit programs. Complementary data was collected from 6 key informants and 3 focus group discussions, two of which were for participants in microcredit programs while one was for the non-participants in microcredit programs. Findings revealed that for microcredit participants, the major source of credit was group based loan institutions such as VSLAs and SACCOs whereas social capital was the major form of collateral. The findings further revealed that nine in ten microcredit beneficiary households reported improved incomes as compared to six in every ten non-microcredit households. Participants in micro-credit programs had better opportunities to increase their incomes than the non-participants in microcredit programs. Additionally, it was found that slightly over half of the microcredit participants had their capacity to educate their children enhanced as compared to a quarter of the non-participant households that reported increased capacity to send and keep their children in school. Results also revealed that access to microcredit had no effect on average meals a household had per day as both participants and non-participants in microcredit programs could afford on average two meals a day. In terms of health improvements at household level, participation in microcredit enhanced a household’s health position as more than half of the participants in microcredit programs reported that their health was more than fair as compared to a quarter of the non-participants in microcredit who reported improvements in household health. In regard to food security, microcredit participants mostly consumed food from markets and food stores at 50.8 percent whereas for non-participants in microcredit programs the main source of food was their individual gardens at 51.7 percent which indicates no marked difference between the participants in microcredit and non-participants in as far access to food is concerned. The study thus indicates that whereas microcredit has been reported to highly impact on the lives of the beneficiaries and makes them stand-out as compared to non-participants, its contribution as a poverty reduction strategy is very negligible. The study did not find much difference between the participants and non-participants in terms of child education, health and household food security.