Impact assessment of micro credit in poverty alleviation through enhancing agricultural production: A case study on NRSP D.G. Khan region [Pakistan]

This study was conducted in Tehsil Dera Ghazi Khan and Jampur, with objectives to asses and evaluate the change in crop productivity and income as a result of Micro credit intervention. Total number of community organizations involved in analysis was 85 of these COs 75 were mate and 10 female. The number of female COs in sample was small because very small number of female COs taking credit for agricultural purpose. These 85 COs were spread over 85 villages. Majority of the males and all females were married. Majority of the respondents (56%) were aged between 25-50 years. 59% of male respondents and 70% of female respondents were illiterate. 75 % of male respondents and 70% of female respondents had a family size of higher than 15 members. Shift in poverty status was observed 4 respondents moved from category 2 of better off to category 1 of well to do 13 respondents (15%) moved from category 3 of poor to category 2 of better off. 5 respondents (18%) moved from category 4 of very poor to category 3 of poor 4 responder, (50%) moved from category 5 of destitute to category 4 of very poor. High concerns were found over interest rate i.e. 24% respondents considered prevailing interest rate as high, and loan size i.e. 32% respondents considered present loan size as much smaller as compared to their credit needs. 20% respondents credit between Rs. 10,000-20,000, 29% respondents demanded credit between Rs. 20,000-30,000, 18% respondents Rs. 30,000-40,000, 14% respondents demanded credit between Rs. 40,000-50,000 and 19% respondents demanded credit greater than Rs. 50,000. 94% respondents preferred NRSP as a credit source while only 6% respondents preferred ADBP as a credit source. The main reason for preference they reported was ease of procedure and approach to NRSP credit. Highest satisfaction was observed for the behavior of NRSP staff only 11% respondents were dissatisfied with the landing procedure. 21-27 respondents considered lump-sum repayment of loan and recovery procedure unsatisfactory. 73% respondents reported increase in crop production and level of income only 43% respondents reported increase in desired level of income. The main constraints in increase in crop production were small loan size (48%) and natural calamities (52%). It was reported that increased farm expenditures and exploitation by government agencies to get low price of their produce had offset their gains from increased crop production. There was a strong relationship between credit size and income, home consumption; saving and saving the results from the correlation analysis were highly significant. Results from the regression analysis were also significant. It was also calculated that change in average income, average home consumption, and average saving before and after credit interventions were positive showing that credit had increased their average income as well as quality of life.