Analysis of Credit Service Utilization by Rural Households: The Case of Humbo Woreda, Wolaita Zone, Ethiopia

The objectives of the study were to analyze credit service utilization by rural households and to assess the prevailing challenges faced by microfinance institutions in the provision of credit service in the study area. In this study multi-stage sampling techniques were used to select 5 kebeles out of 42 kebeles of the study area and 150 sample households were randomly selected, of which 82 were credit users and 68 of them were non-users. Primary data were collected through structured and semi- structured interview schedule, Key Informant Interviews and Focus Group-Discussions. Various documents were reviewed to collect secondary data. To analyze the data, descriptive statistics such as mean, standard deviation, percentage, and frequency distribution were used to describe the institutional, socio-economic and demographic characteristics of the sample households. In addition, t-tests and chi-square tests were used to compare credit user and non-user sample groups with respect to the explanatory variables. Socio-economic factors such as income, possession of fixed asset, risk fearing, saving habit and opinion on group lending had showed significant relationship with credit service utilization. In addition to this, institutional factors like lending procedure, type of collateral required, and training and technical advice had showed significant relationship with credit service utilization. Therefore, credit service providers should give attention to factors that significantly influence credit service utilization by rural households, focus to institutional capacity building, implementing a working and effective follow-up system, and designing human resource development plan need to be implemented by the concerned authorities to improve the performance of microfinance service provision and credit service utilization. Keywords: Credit Service, Rural Households, Credit Utilization, Microfinanc

Socio-Economic Determinants of Credit Service Utilization by Smallholder Households at Wolaita Zone, Ethiopia

The objective of the study was to identify the determinants of credit service utilization in the study area. In this study multi-stage sampling techniques were used to select 5 kebeles out of 42 kebeles of the study area and 150 sample households were randomly selected, of which 82 were credit users and 68 of them were non-users. Primary data were collected through structured interview schedule. Various documents were reviewed to collect the secondary data. In the study Econometric model (binary logit model) was used to identify the determinants of credit service utilization. A total of fifteen explanatory variables were included in the model. Out of these, seven were found to be statistically significant and most of the coefficients of these variables exhibited the expected signs with the hypothesis. These variables include total income, saving habit, collateral type, training and technical advice, possession of fixed assets, risk fearing and lending procedure. Therefore, credit service providers should give attention to factors that significantly influence credit service utilization in order to improve the performance of microfinance service provision and credit service utilization. Keywords: Credit, binary logistic regression model, Determinants, Credit Utilization, Smallholder Households, Wolaita Zone  

Analysis of Credit Service Utilization by Rural Households: The Case of Humbo Woreda, Wolaita Zone, Ethiopia

The objectives of the study were to analyze credit service utilization by rural households and to assess the prevailing challenges faced by microfinance institutions in the provision of credit service in the study area. In this study multi-stage sampling techniques were used to select 5 kebeles out of 42 kebeles of the study area and 150 sample households were randomly selected, of which 82 were credit users and 68 of them were non-users. Primary data were collected through structured and semi- structured interview schedule, Key Informant Interviews and Focus Group-Discussions. Various documents were reviewed to collect secondary data. To analyze the data, descriptive statistics such as mean, standard deviation, percentage, and frequency distribution were used to describe the institutional, socio-economic and demographic characteristics of the sample households. In addition, t-tests and chi-square tests were used to compare credit user and non-user sample groups with respect to the explanatory variables. Socio-economic factors such as income, possession of fixed asset, risk fearing, saving habit and opinion on group lending had showed significant relationship with credit service utilization. In addition to this, institutional factors like lending procedure, type of collateral required, and training and technical advice had showed significant relationship with credit service utilization. Therefore, credit service providers should give attention to factors that significantly influence credit service utilization by rural households, focus to institutional capacity building, implementing a working and effective follow-up system, and designing human resource development plan need to be implemented by the concerned authorities to improve the performance of microfinance service provision and credit service utilization. Keywords: Credit Service, Rural Households, Credit Utilization, Microfinanc

On-Farm Activities and Households Food Security in Wolaita Zone, Ethiopia

Objectives of the study were to measure status of household food security, to measure the severity levels of household food insecurity, and to analyze factors affecting on-farm activities. In the study multi-stage sampling techniques were used to select 5 kebeles and 140 sample households out of 23 kebeles of the study area. Primary data were collected through structured interview schedule, key informants interview, focus group-discussions and direct observation. Various documents were also reviewed to collect the secondary data. The quantitative data were analyzed by descriptive statistics and qualitative data were analyzed through generalization summarization and categorization. Household food security was measured using calorie consumption method. A binary logit model was used to analyze factors affecting on-farm activities. The findings of the study revealed that about 57% of the rural households were food insecure and 43% were food secure. A total of eleven explanatory variables were included in the model from which seven variables showed a significant effect on household food security.  The estimated model correctly predicted 92.1% of the total sample households. To estimate the extent of food insecurity FGT index was used. Accordingly, the incidence of food insecurity, food insecurity gap and severity of food insecurity were found to be 57%, 24% and 11.67%, respectively. Keywords: Food security, on-farm activities, binary logistic regression model, incidence of food insecurity, food insecurity gap, severity of food insecurity, FGT index