1.1 Background of the Study
Indigenous leafy vegetables enterprise holds the greatest potentials for the provision of additional sources of food, nutritional value, and income particularly for the rural resource-constraint women farmers in Nigeria. In many parts of Africa, indigenous vegetables are considered to be “women’s crops” because they are mostly grown or gathered by women (Howard, 2003) for both domestic consumption and for sale in markets (Price & Ogle, 2008). Gathering plants takes place in fields when crops are growing, in fallow fields and in areas of secondary growth (Price & Ogle, 2008). This practice offers a significant opportunity for the poorest people to earn a living, as producers and traders without requiring large capital investments (Maroyi, 2011). Where indigenous vegetable is grown, its production is basically small-scale using traditional manual techniques. Production of indigenous vegetables often requires very little input save for occasional farmyard manure application and very rarely is chemical fertilizer used (Onyango, Imungi, Mose, Harbinson, & Van Kooten, 2009).
They are referred to as plants which are consumed in addition to starchy foods in other to make it palatable. Moreover, they increased awareness of the health protecting properties of vegetable as directed immense attention for its consumption in daily diet (Smith and Eyzaguirre, 2006). They are to be bulk of diet and help the body to achieve digestion of food (Muhammad and Shinkafi, 2014).
The importance of the nutritional status of vegetables by Nigerians has resulted in the increased demands for the knowledge of food nutrients.
Leafy vegetables are used to alleviate the problems of micro-nutrient, malnutrition and are very prominent in tropical Africa (Ejohet al., 2005).
In developing countries, the consumption of vegetables is generally lower than the FAO recommendation of 75kg per year in habitat (206g per day per capital). In urban areas where the village pattern is being replaced by a more sophisticated way of life many people in the community cannot produce their own vegetables and a few part-time growers devote their spare time to the production.
Some tropical leafy vegetables (TVLs) such as Amaranthuscruentus and Vernomiaamygdalinaare rich in several nutrients especially, B-Carotene Vitamin C or Ascorbic acid, Protein, Irons, Folic acid, dietary anaemia factors, and also other minerals such as Phosphorus, Calcium, Sodium, Copper, Magnesium, and Potassium (Abosi and Rasoreta, 2003).
The revenue generated contributes significantly to the enhancement of household food security, access to family health care and enable women to attain some degree of financial independence within the family budget (IITA, 2003).
There are over two hundred thousand people living in extreme poverty today. They are said to live on less than one US dollar per day (World Bank, 2003). Majority of the poor people live in the rural area where a large proportion of the people are engaged in on form of farming or another. Haggblade in 2004 noted that significant poverty reduction will not be possible without rapid agricultural growth.
According to Aniedu (2007) noted that, most of the essential farm inputs are rather not readily available or their cost is beyond the reach of most farmers. He equally observed other problems to include; lack of credit facilities, finding of research and inadequate storage facilities. The premise is that the level of technology prevailing in a given society reflects its capacity to optimize the use of natural and human resources in production (Nwaruet al., 2008).
Poverty for long has been a major contending force against the pace development in Nigeria especially the rural areas. It has remained persistently unabated despite many laudable programmes designed to alleviate it.
Reports from UNDP (2008), Federal office of Statistics (2001) and World Bank (2001) showed that the incidence of poverty rose from 28.1% in 1980 to 43.6% in 1985, and by 1996, it rose to 65.6%. as far back as 1990, the UNDP Human Development Report described Nigeria as a rich country with poor population and also as the most poorest and most deprived OPEC Country (UNDP, 2008).
Micro-credit programmes extend small loans to very poor people for self-employment projects that generate income for their survival, allowing them to care for themselves and their families. Developed over the last twenty years, micro-credit is now considered as one of the most effective tools that we have to fight poverty. It is not charity, but and investment, and to understand it we need to look at poverty in the world today.
Microcredit is the extension of very small loans (microloans) to impoverished borrowers who typically lack collateral, steady employment and a verifiable credit history. It is designed not only to support entrepreneurship and alleviate poverty, but also in many cases to empower women and uplift entire communities by extension. In many communities, women lack the highly stable employment histories that traditional lenders tend to require. Many are illiterate, and therefore unable to complete paperwork required to get conventional loans. As of 2009 an estimated 74 million men and women held microloans that totalled US$38 billion. (en.wikipedia.org/wiki/Microcredit).
During the last two decades, micro-credit approach has been increasingly incorporated in the agricultural development discourse. Specially the credit is given to the arable women farmers, and the popular belief is that women are benefited and empowered and are being acknowledged for having a productive and active role and thus it is the gateway of gaining freedom for themselves.
However, today there is an extensive debate on positive respectively negative consequences of micro-credit system and its potential to eliminate poverty; where the gap between poor and rich is increasing, people below the poverty line is accumulating its volume. Some studies find micro- credit a very successful and effective way of reaching development goals, while other acknowledge issues such as women lacking control over capital, creation of dependency for the loans and services, not reaching the poorest of the poor (Thente, 2003).
The renewed focus on agriculture as holding the key to national development, in the face of an uncertain and vulnerable oil economy, posses a compelling challenge to the rural farmers access to micro credit facilities and their full participation in sustainable agricultural development. The ever increasing food insecurity in Nigeria urgently requires total mobilization and prudent utilization of all available opportunities and potentials. The need to maintain sustainable agricultural and rural development in the current innovative micro credit programmes has thus far been extremely limited in Nigeria rural setting. In this current system of global economic innovative development efforts should be targeted towards financial challenges with regard to rural transformation. Efforts made by the rural farmers to get financial assistance are always constrained by unnecessary strings attached to the credit services, especially collaterals used for assessing the borrower’s credit worthiness, there is need for the agricultural sector to be properly financed through micro credit. Agricultural credit enhances productivity and promotes standard of living by breaking the vicious cycle of poverty of small – scale farmers (Nenna, Ugbajah and Ugwumba 2012). One of the reason for the decline in the contribution of agriculture to the Nigerian economy is the lack of a stable national credit policy and paucity of credit institutions which can assist farmers (Odoemenem and Obinne, 2010).Micro credit is an important instrument for improving the welfare of the poor directly through consumption smoothening that reduces vulnerability to short term income (Afolabi, 2005). Micro credit is considered from its ability to energize or motivate other factors of productions. It can latent potentials or underused capacities functional in such situation credit acts as a catalyst, which activates the engine of growth in agriculture. Small – scale enterprises including the rural farmers in Nigeria are confronted with inadequate capital despite the fact that small – scale farmers produce the bulk of food consumed locally and some export crops which generate foreign exchange to the country.
1.2 Statement of Problem
In Nigeria, the formal financial system provides services to about 35% of the economically active population while the remaining 65% are excluded from access to financial services (CBN, 2011). This 65% are often served by the informal financial sector, through Non-Governmental Organization (NGO)-microfinance institutions, money-lenders, friends, relatives, and credit unions. The practice of microfinance in Nigeria is culturally rooted and dates back several centuries. The traditional microfinance institutions provide access to credit for the rural and urban low income earners. They are mainly of the informal Self-Help Groups (SHGs) or Rotating Savings and Credit Associations (ROSCAs) types (CBN, 2006). Other providers of microfinance services include savings collectors and co-operative societies. The informal financial institutions generally have limited outreach due primarily to paucity of loanable funds.
In order to enhance the flow of financial services to Nigerian rural areas, the Federal Government has, in the past, initiated a series of publicly-financed micro/rural credit programmes and policies targeted at the poor. Notable among such programmes were the Rural Banking Programme, Sectoral Allocation of Credits, a concessionary interest rate, and the Agricultural Credit Guarantee Scheme (ACGS). Other institutional arrangements were the establishment of the Nigerian Agricultural and Co-operative Bank Limited (NACB), the National Directorate of Employment (NDE), the Nigerian Agricultural Insurance Corporation (NAIC), the Peoples Bank of Nigeria (PBN), the Community Banks (CBs), and the Family Economic Advancement Programme (FEAP). In 2000, Government merged the NACB with the PBN and FEAP to form the Nigerian Agricultural Co-operative and Rural Development Bank Limited (NACRDB) to enhance the provision of finance to the agricultural sector. It also created the National Poverty Eradication Programme (NAPEP) with the mandate of providing financial services to alleviate poverty (Ayeyomi, 2003). Since the 1980s, Non-Governmental Organizations (NGOs) have emerged in Nigeria to champion the cause of the micro and rural entrepreneurs, with a shift from the supply-led approach to a demand-driven strategy. The number of NGOs involved in microfinance activities has increased significantly in recent times due largely to the inability of the formal sector to provide the services needed by the low income groups and the poor, and the declining support from development partners amongst others. The NGOs are charity, capital lending and credit-only membership based institutions. They are generally registered under the Trusteeship Act as the sole package or part of their charity and social programmes of poverty alleviation. The NGOs obtain their funds from grants, fees, interest on loans and contributions from their members. However, they have limited outreach due, largely, to unsustainable sources of funds (Bamisele, 2011).
1.3 Research Question
- (i) What are the socio-economic characteristics of the respondents?
- (ii) What are the poverty statuses of the respondents?
- (iii) How profitable is leafy vegetable among the respondent?
- (iv) What are the effect of microcredit on beneficiary and non-beneficiary leafy vegetable farm return?
- (v) What are the factor influencing poverty level among the respondent?
1.4 Objective of the Study
The broad objective of the study is the effect of microcredit on poverty alleviation on leafy vegetable farmers. The specific objectives of the study are as follows:
- To describe the socio-economic characteristics of the beneficiary and non-beneficiary leafy vegetable farmers in the study area
- To examine the poverty status of the respondents
- To highlights the profitability of leafy vegetable among the respondents
- To determine the effect of microcredit on beneficiary and non-beneficiary leafy vegetable farm return
- To examine the factor influencing poverty level among the respondent
1.5 Research Hypothesis
The research hypothesis for the purpose of this study are stated in the alternate form:
Ho: There is no significant relationship between the socio-economic characteristics of the respondents and their poverty level
Ha: There is significant relationship between the socio-economic characteristics of the respondents and their poverty level.
Ho: There is no significant effect of microcredit on the socio-economic characteristics of the respondents and their returns
Ha: There is significant effect of microcredit on the socio-economic characteristics of the respondents and their returns
1.6 Justification of the study
Effect of micro credit on poverty alleviation on leafy vegetable farming cannot be overestimated in developing country making it effective on extension of small loan to very poor people for self-employment project that generate income for their survival, allowing them to care for themselves and their families. It is designed not only to support entrepreneurship and alleviate poverty but also in many cases to empower women and uplift entire communities by extension.