Impact of Microcredit on Income Levels and Income-Generating Activities among Small-Scale Farmers in Rural Southeast Nigeria
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Abstract
This study examined the impact of microcredit on income levels and income-generating activities among small-scale farmers in rural Southeast Nigeria. Employing a cross-sectional survey design, 360 households were sampled, comprising 180 microcredit beneficiaries (treated households) and 180 non-beneficiaries (comparison households), across Abia, Imo, and Anambra States. Households were identified using datasets provided by microfinance banks operating in the region, with propensity score matching applied to ensure comparability between the two groups. Primary data were collected using structured questionnaires and analysed using ordinary least squares regression and mean-score analysis. Findings from the Cobb-Douglas regression model indicated that microcredit use was positive and highly significant in the pooled model (β = 1.329, p < 0.01), confirming that access to microcredit increased income levels. Other significant positive determinants of income among treated households included farming experience, household size, level of education, farm size, cooperative membership, quantity of agrochemicals, and quality of planting materials, while age and labour cost had negative effects. Mean-score analysis revealed that treated households reported significantly stronger positive experiences across all ten income-generating activity indicators compared with comparison households, with all differences statistically significant at the one percent level (grand mean: treated = 4.14, comparison = 2.97). The study recommends expanding and better structuring microcredit programmes to promote productive farm investments and financial literacy among small-scale farmers in rural Southeast Nigeria.
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Copyright (c) 2026 SYLVANUS I. OGBONNA, Muhammad, M. U., Adole, P. O. (Author)
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