Microfinancial inclusion nexus poverty alleviation: the case of Nigeria

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Chi Aloysius Ngong ◽  
Kesuh Jude Thaddeus ◽  
Josaphat Uchechukwu Joe Onwumere
Keyword(s):  
Money Supply ◽  
Commercial Bank ◽  
Rural Areas ◽  
Poverty Alleviation ◽  
Poverty Reduction ◽  
Microfinance Institutions ◽  
Content Type ◽  
Bank Branches ◽  
The Poor ◽  
Long Run

PurposeThis research examines the long-run relationship between microfinancial inclusion and poverty alleviation in Nigeria from 1990 to 2018.Design/methodology/approachthe Engle–Granger two-step co-integration and autoregressive distributed lag (ARDL) techniques. Gross domestic product (GDP) per capita proxies poverty reduction. Number of microfinance banks, borrowers of microfinance institutions, commercial bank branches, commercial bank loan to small-scale businesses and broad money supply ratio measure microfinancial inclusion.FindingsThe results indicate a long-run relationship between microfinancial inclusion and poverty reduction. The error correction model reveals that microfinancial inclusion and poverty alleviation converge to long-run equilibrium. The number of microfinance banks, lagged value of borrowed funds and broad money supply negatively influences poverty while the lagged values of number of microfinance banks and broad money supply positively influence poverty.Research limitations/implicationsEffective ways to improve microcredit channels and liquidity flow to the poor through a microfinance bank's intermediation should be promoted by the Central Bank of Nigeria (CBN) using an aggressive policy, which provides access to credit to the poor.Practical implicationsTheoretically, microfinance institutions should increase credit to the poor, especially in rural areas at moderate cost. This study further suggests that many microfinance bank branches should be located in urban and rural areas targeting the poor.Social implicationsMicrofinancial inclusion reduces population's poverty in Nigeria and globally.Originality/valueContrary to other studies, this paper utilizes number of microfinance institutions and borrowers of microfinance institutions to examine the relationship between microfinancial inclusion and poverty alleviation in Nigeria.

Farmers' preferences and willingness to pay for microcredit in Benin: results from in-the-field choice experiments in Benin

2020 ◽  
Vol 80 (5) ◽  
pp. 665-692 ◽  
Author(s):  
Tchekpo Fortune Ogouvide ◽  
Ygue Patrice Adegbola ◽  
Roch Cedrique Zossou ◽  
Afio Zannou ◽  
Gauthier Biaou
Keyword(s):  
Willingness To Pay ◽  
Interest Rates ◽  
Rural Areas ◽  
Financial Services ◽  
Poverty Reduction ◽  
Latent Class ◽  
Microfinance Institutions ◽  
Choice Modelling ◽  
Attribute Importance ◽  
Content Type

PurposeThis document analyses farmers' preferences and willingness to pay (CAP) for microcredit, in order to facilitate their access in rural areas.Design/methodology/approachData are based on a discrete choice experiment with 400 randomly selected farmers from 20 villages of the 7 Benin agricultural development hubs (ADHs). The preference choice modelling was performed using mixed logit (MXL) and latent class logit (LCL) models. Farmers' willingness to pay for each preferred attribute was estimated. The endogenous attribute attendance (EAA) model was also used to capture attribute non-attendance (ANA) phenomenon.FindingsThe results indicate that, on average, farmers prefer individual loans, low interest rates, in kind + cash loans, cash loans, disbursement before planting and loans with at least 10-month duration. These preferences vary according to farmers' classes. Farmers are willing to pay higher or lower interest rates depending on attribute importance. The estimate of the EAA model indicates that, when taking the ANA phenomenon into consideration, people will show stronger attitudes regarding WTP for important factors.Research limitations/implicationsBased on these results from Benin, microfinance institutions (MFIs) in developing countries can, based on the interest rates currently charged, attract more farmers as customers, reviewing the combination of the levels of the attributes associated with the nature of the loan, the type of loan (individual or collective), the disbursement period of funds, the waiting period of the loan and the loan duration. However, the study only considered production credit, ignoring equipment or investment credit.Practical implicationsThe document provides information on the key factors that can facilitate producers' access to MFI products and services.Social implicationsFacilitating small farmers' access to financial service will contribute to poverty reduction.Originality/valueThis research contributes to the knowledge of the attributes and attribute levels favoured by farmers when choosing financial products and the amounts they agree to pay for these attributes. The implementation of the results would facilitate small producers' access to financial services; thus contributing to poverty reduction.

The impact of government procurement and anti-poverty efforts on sales format selection in a supply chain

Kybernetes ◽  
2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Qingyu Zhang ◽  
Tianlong Luo
Keyword(s):  
Supply Chain ◽  
Rural Areas ◽  
Poverty Alleviation ◽  
Stackelberg Game ◽  
Market Price ◽  
Government Procurement ◽  
Content Type ◽  
The Poor ◽  
Poor Farmer ◽  
The Impact

PurposeIn the presence of government procurement, one important driving force behind a poor farmer entering into sales format agreements is to improve profits. In this study, the authors examine two widely used sales formats, namely resale format and agent format, to investigate how parameters influence the optimal sales format selection and decision equilibriums of supply chain members under the scenarios with or without the buyer's poverty alleviation efforts.Design/methodology/approachThis paper adopts the Stackelberg game-theoretical approach to examine the interactions between the farmer from poor/rural areas and the buyer.FindingsThe authors find that under certain conditions, the optimal sales format of the poor farmer and buyer can be consistent, which eliminates conflicts in the sales format selection. In addition, with the buyer's poverty alleviation effort, the poor farmer and buyer can achieve the Pareto improvement, which is a win–win outcome for them. The authors also find that the market price in government procurement is independent of competition, which is consistent with practical observations.Originality/valueIt is the first study to investigate the optimal sales format selection given government procurement as a poverty alleviation effort which is in competition with a firm's regular channel.

scholarly journals The Role of Islamic Microfinance for Poverty Alleviation in Mogadishu, Somalia: An Exploratory Study

2019 ◽  
Vol 6 (4) ◽  
pp. 355-365
Author(s):  
Mohamed Abdi Elmi Xalane ◽  
Marhanum Che Mohd Salleh
Keyword(s):  
Poverty Alleviation ◽  
Poverty Reduction ◽  
Current Practice ◽  
Descriptive Analysis ◽  
Quantitative Methodology ◽  
Microfinance Institutions ◽  
The Poor ◽  
Standards Of Living ◽  
Islamic Microfinance

This research aims to investigate the current practice of Islamic microfinance in Mogadishu, Somalia and to examine the effectiveness of Islamic microfinance institutions in Somalia on poverty reduction. In total, 65 microfinance recipients participated in the survey. This research adopts a quantitative methodology, using a survey and descriptive analysis. Findings show that the current practice of Islamic microfinance in Mogadishu is serving the poor and that these microfinance activities are effective in terms of obtaining loans, enhancement of standards of living and usefulness of the system. Nonetheless, there is a low level of awareness among the locals regarding the availability of Islamic microfinance.

scholarly journals Non-governmental organisations and rural poverty reduction strategies in Zimbabwe: A case of Binga rural district

2015 ◽  
Vol 4 (4) ◽  
pp. 59-68 ◽  
Author(s):  
Stephen Mago ◽  
Daina Nyathi ◽  
Costa Hofisi
Keyword(s):  
Rural Areas ◽  
Poverty Alleviation ◽  
Poverty Reduction ◽  
Rural Poverty ◽  
Participatory Development ◽  
Rural District ◽  
Specific Reference ◽  
The Poor ◽  
Reduction Strategies ◽  
The Government

The purpose of this paper is to evaluate the effectiveness of strategies implemented by Non-governmental organisation (NGOs) for poverty alleviation in Zimbabwe with specific reference to Zimbabwe’s Binga Rural District. The qulitative research methodology was employed in the article. Data were collected using questionnaires and interviews. Findings indicated that NGOs do not adequately fulfil the needs of the poor due to ineffective strategies that they implement. There is insufficient understanding of the livelihoods of the poor in Binga, hence the need for participatory development approaches. Deepening and widening poverty in the rural areas that are currently served by NGOs is an indicator that their poverty alleviation strategies are inadequate and ineffective to deal with poverty in these rural areas. The paper recommends a policy shift by both NGOs and the government to improve the poverty reduction strategies used by NGOs.

scholarly journals The Dynamic Impact of Agricultural Fiscal Expenditures and Gross Agricultural Output on Poverty Reduction: A VAR Model Analysis

2021 ◽  
Vol 13 (11) ◽  
pp. 5766
Author(s):  
Guanglu Zeng ◽  
Chenggang Zhang ◽  
Sanxi Li ◽  
Hailin Sun
Keyword(s):  
Rural Areas ◽  
Poverty Alleviation ◽  
Local Governments ◽  
Poverty Reduction ◽  
Time Frame ◽  
Sustainable Growth ◽  
Var Model ◽  
Poverty Eradication ◽  
Output Analysis ◽  
Fiscal Spending

China was the first developing country to achieve the poverty eradication target of the 2030 Agenda for Sustainable Development Goals (SDG) 10 years ahead of schedule. Its past approach has been, mainly, to allocate more fiscal spending to rural areas, while strengthening accountability for poverty alleviation. However, some literature suggests that poor rural areas still lack the endogenous dynamics for sustainable growth. Using a vector autoregression (VAR) model, based on data from 1990 to 2019, we find that fiscal spending plays a much more significant role in reducing the poverty ratio than agricultural development. When poverty alleviation is treated as an administrative task, each poor village must complete the spending of top-down poverty alleviation funds within a time frame that is usually shorter than that required for successful specialty agriculture. As a result, the greater the pressure of poverty eradication and the more funds allocated, the more poverty alleviation projects become an anchor for accountability, and the more local governments’ consideration of industry cycles and input–output analysis give way to formalism, homogeneity, and even complicity. We suggest using the leverage of fiscal funds to direct more resources to productive uses, thus guiding future rural revitalization in a more sustainable direction.

scholarly journals Evaluating the Impacts of Smallholder Farmer’s Participation in Modern Agricultural Value Chain Tactics for Facilitating Poverty Alleviation—A Case Study of Kiwifruit Industry in Shaanxi, China

Agriculture ◽  
2021 ◽  
Vol 11 (5) ◽  
pp. 462
Author(s):  
Hongyu Wang ◽  
Xiaolei Wang ◽  
Apurbo Sarkar ◽  
Lu Qian
Keyword(s):  
Value Chain ◽  
Rural Areas ◽  
Poverty Alleviation ◽  
Poverty Reduction ◽  
Smallholder Farmers ◽  
Multidimensional Poverty ◽  
Well Being ◽  
Reduction Degree ◽  
Poverty Level ◽  
Storage Technology

Market-based initiatives like agriculture value chain (AVC) are becoming progressively pervasive to support smallholder rural farmers and assist them in entering larger market interventions and providing a pathway of enhancing their socioeconomic well-being. Moreover, it may also foster staggering effects towards the post-era poverty alleviation in rural areas and possessed a significant theoretical and practical influence for modern agricultural development. The prime objective of the study is to explore the effects of smallholder farmers’ participation in the agricultural value chain for availing rural development and poverty alleviation. Specifically, we have crafted the assessment employing pre-production (improved fertilizers usage), in-production (modern preservation technology), and post-production (supply chain) participation and interventions of smallholder farmers. The empirical data has been collected from a micro survey dataset of 623 kiwifruit farmers from July to September in Shaanxi, China. We have employed propensity score matching (PSM), probit, and OLS models to explore the multidimensional poverty reduction impact and heterogeneity of farmers’ participation in the agricultural value chain. The results show that the total number of poor farmers who have experienced one-dimensional and two-dimensional poverty is relatively high (66.3%). We also find that farmers’ participation in agricultural value chain activities has a significant poverty reduction effect. The multidimensional poverty level of farmers using improved fertilizer, organizational acquisition, and using storage technology (compared with non-participating farmers) decreased by 30.1%, 46.5%, and 25.0%, respectively. The multidimensional poverty reduction degree of male farmers using improved fertilizer and participating in the organizational acquisition is greater than that of women. The multidimensional poverty reduction degree of female farmers using storage and fresh-keeping technology has a greater impact than the males using storage and improved storage technology. Government should widely promote the value chain in the form of pre-harvest, production, and post-harvest technology. The public–private partnership should also be strengthened for availing innovative technologies and infrastructure development.

Assessing the Livelihood Empowerment Against Poverty (LEAP) program as a conditional income transfer: a search for a conceptual framework

2022 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Alhassan Abdul-Wakeel Karakara ◽  
Ernest Amoabeng Ortsin
Keyword(s):  
Conceptual Framework ◽  
Poverty Reduction ◽  
Social Protection ◽  
Insurance Coverage ◽  
Implementation Strategies ◽  
Cash Transfer ◽  
Primary Data ◽  
Transfer Program ◽  
Content Type ◽  
The Poor

Purpose Ghana has implemented different kinds of pro-poor program and policies since its independence to reduce poverty. The Livelihood Empowerment Against Poverty (LEAP) is one of such program. LEAP is a social cash transfer program and its implementation has been under the auspices of the Ministry of Gender, Children and Social Protection since 2008. It provides direct cash and health insurance coverage for extremely poor households across the country to alleviate short-term poverty and encourage long-term human capital development. This paper examines the LEAP program in terms of how it has achieved its aim and the opportunities for improvement.Design/methodology/approach Primary data were obtained from interviews of 110 beneficiaries of the program. The study proposes a conceptual framework that links poverty reduction and social policies to assist researchers analyze pro-poor or social cash transfer program.Findings The findings show that the program is challenged with administrative bureaucracies, irregular inflow of funds, perceived political interferences, inconsistent implementation strategies and low value of the cash transfer (which results in little or no impact on consumption). However, the data also show that LEAP has positive impacts on nonconsumption spending like children's schooling. The program' exit strategy does not impact much on beneficiaries to allow them exit without the tendency of being poor.Practical implications This paper discussed the LEAP program as a social cash transfer to the poor in Ghana. The study constructed a conceptual framework to help researchers and practitioners analyze the implementation of pro-poor interventions. This conceptualization allows for cash transfer program to empower beneficiaries and exits them to allow for other beneficiaries to enroll, ensuring reduction in poverty over time. Generally, the beneficiaries have benefited from the LEAP in the areas of consumption, education and healthcare with few beneficiaries being able to accumulate some few assets. The LEAP program has no exit plan.Originality/value This study adds to literature by offering a conceptual framework to help researchers and policy makers in dealing with social assistance policies to the poor. The study also gave an insight into how pro-poor policy strategies could be crafted.

scholarly journals Indonesia’s Village Fund Program: Does It Contribute to Poverty Reduction?

2021 ◽  
pp. 65-80
Author(s):  
Novita Briliani Saragi
Keyword(s):  
Rural Development ◽  
Rural Areas ◽  
Poverty Alleviation ◽  
Poverty Reduction ◽  
Development Index ◽  
The Status ◽  
The Government ◽  
The Village ◽  
Descriptive Method

To stimulate rural development and reduce poverty in rural areas, The Government of Indonesia enacted the policy of Village Fund in 2014. However, a few studies have been conducted to examine this program. This study describes how poverty alleviation goes following Village Fund Program in Indonesia between 2015-2019. The poverty reduction was represented by holistic data, including insufficient and village status improvement through the Village Development Index (VDI). The analysis is conducted using a descriptive method by dividing the areas into six regions, Sumatera, Java & Bali, Kalimantan, Sulawesi, Maluku & NT, and Papua. The result showed that over five years, the village fund dramatically increases. Moreover, this growth is along with the slight decline the poverty. The researchers found that the decreasing number of poverty from 2015 to 2019 is about 15%. The VDI status for districts/municipalities shows that the status improved from underdeveloped villages in 2015 to developing villages in 2019. Java is the region that contributed to making the status improved either to be developing, developed, or independent. At the same time, it is the Papua region known as the region consisting of most of the least underdeveloped villages. Since the goal of this policy in poverty reduction still works slowly, it needs a lot of effort from many levels of government, from the village, regional, and national officials, to work together cooperatively.

Adopting Islamic microfinance as a mechanism of financing small and medium enterprises in Uganda

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ssemambo Hussein Kakembo ◽  
Muhamad Abduh ◽  
Pg Md Hasnol Alwee Pg Hj Md Salleh
Keyword(s):  
Financial Services ◽  
Small And Medium Enterprises ◽  
Skills Training ◽  
Microfinance Institutions ◽  
Alternative Scheme ◽  
Content Type ◽  
The Poor ◽  
Islamic Microfinance ◽  
Financial Challenges ◽  
Medium Enterprises

PurposeDespite the fact that small and medium enterprises (SMEs) play a crucial role in strengthening the financial sector within developing and emerging economies through providing employment opportunities to the rural and urban population, capacity building in the form of skills training and economic empowerment, they still face a plethora of challenges that continue to threaten their existence, performance and growth. Access to operational and administrative funds needed to execute their activities effectively is a significant challenge and detrimental to the growth of SMEs in Uganda. Conversely, Islamic microfinance has been noted as a panacea to the challenges of financial inaccessibility among SMEs, especially in developing countries. The purpose of this paper is therefore to investigate how the adoption of Islamic microfinance can play a fundamental role in enhancing the sustainability of microfinance institutions (MFIs) while meeting the financing challenges of SMEs in Uganda.Design/methodology/approachIn this study, a review of existing literature was carried out to critically examine relevant information (literature sources) and empirical studies on SMEs, their performance and challenges. The study being conceptual tries to understand how Islamic microfinance could be adopted as an alternative scheme of financing to bridge the gap and mitigate the financial challenges facing SMEs.FindingsThe study finds that the existing MFIs have failed to achieve their objectives of providing financial services to the poor and SMEs while remaining sustainable. This has left the majority of SMEs within Uganda's informal sector financially handicapped, thus leading to their failure in meeting their expectations and eventually collapsing even before celebrating their third or fourth birthdays. However, the enactment into law of the Financial Institutions Amendment Act 2016 that paved the way for the introduction of Islamic finance in Uganda, and the Tier 4 Microfinance Institutions and Money Lenders' Act, 2016 that incorporated the aspects of Islamic microfinance within the existing microfinance framework as seen and is perceived as a key factor in addressing the financial challenges faced by MFIs and the SMEs if fully adopted.Research limitations/implicationsThis study is conceptual with no empirical investigation and discussion of key theories. On the contrary, it will be imperative and useful when carrying out more extensive hypothetical studies by future researchers, specifically in the area of Islamic microfinance that is relatively new in Uganda.Practical implicationsPractically, this paper will serve as a guide to policymakers and practitioners in the field of microfinance by adding a flair that could enable in bridging the challenges associated with inadequate financing of SMEs in Uganda.Social implicationsSocially, the social aspects of charity (Zakah and Sadaqah) will help to improve the livelihood of the poorest of the poor who cannot engage in active business through meeting their basic needs of life without begging thereby preventing them from being social outcasts.Originality/valueThe study establishes Islamic microfinance (IMF) as a promising and unexplored viable option potentially needed in intensifying the financing needs of SMEs in Uganda. The paper provides an entirely new dimension in nature and way microfinance products should be structured with a view of ensuring that there is sustainable provision of financial services to SMEs. The paper adds real value to the existing conventional microfinance products and services in Uganda, given the ethical and moral attributes of Islamic microfinancing practices that are assumed to efficiently and effectively motivate SME owners and other small entrepreneurs to thrive.

The role of entrepreneurship in reducing poverty in agricultural communities

2021 ◽  
Vol 15 (5) ◽  
pp. 665-683
Author(s):  
Mufaro Dzingirai
Keyword(s):  
Poverty Reduction ◽  
The Body ◽  
Exploratory Research ◽  
Microfinance Institutions ◽  
Cross Sectional ◽  
Content Type ◽  
Agricultural Communities ◽  
Agricultural Entrepreneurship ◽  
Practical Implications

Purpose Entrepreneurship has increasingly become a subject of interest for scholars and policymakers in an attempt to reduce poverty in agricultural communities across the world, especially in Africa. Accordingly, the purpose of this paper is to examine the role of entrepreneurship in reducing poverty in agricultural communities of Lower Gweru, Zimbabwe. Design/methodology/approach Exploratory research design informed the data collection and analysis in this study. In-depth interviews were conducted with 20 owners of agribusinesses from various socio-economic backgrounds. The collected data from the field were analyzed using thematic analysis. Findings The results revealed that entrepreneurship plays a catalytic role in poverty reduction in agricultural communities through food security, skill transfer, employment creation, income generation and a decrease in food costs. Research limitations/implications This study focused on four agricultural communities in Lower Gweru which can limit the generalizability of the results to other contexts. Furthermore, this inquiry is a cross-sectional study that did not capture the longitudinal factors that can affect entrepreneurship and poverty reduction in agricultural communities. Practical implications The research outcomes have some practical implications for the Zimbabwean government and microfinance institutions in designing policies and programs to reduce poverty in marginalized agricultural communities. The findings are also useful for non-governmental organizations in designing, monitoring and evaluating poverty reduction programs in agricultural communities. Originality/value This study advances, contextualizes and enriches the body of knowledge concerning agricultural entrepreneurship and poverty reduction in the under-researched setting of agricultural communities. Notably, this study captures the African flavor in the agricultural entrepreneurship and poverty reduction discourse by focusing on the unique Zimbabwean context.

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