Does Access to Credit Reduce Poverty : A Case Study of Merit Financial Services

Author

Chitakasha , Abgail

Title

Does Access to Credit Reduce Poverty : A Case Study of Merit Financial Services

Abstract

Microfinance has become a very important economic empowerment tool for reducing poverty across the globe. The assumption is that by improving access to credit, poor households will be able to set up micro enterprises that will generate income that is aimed at reducing poverty both at household and community levels. The major objective of the study was therefore to examine the impact of access to credit on poverty alleviation in Zimbabwe using the clients of Merit Financial Services in Harare. The study was based on questionnaires which were distributed to the clients of Harare branch. The researcher used explanatory research design. Data was analysed using SPSS (version 20) and inferential statistics were employed. Data collection was done through use of questionnaires; a sample size of 150 respondents (n=150) was used obtained by a stratified and simple random sampling methods. A moderate multiple regression analysis was used. A multivariate regression model was applied to determine the relative importance of each of the variables. The respondents could easily understand the questionnaires and they filled them accordingly. Some of the factors that show poverty reduction are training and education, clean water and hygienic environment, nutrition and adequate food, accommodation and income. Overall we can say that education, clean water and hygienic environment, nutrition and adequate food, accommodation, income and savings are important factors of poverty reduction. The results permit the following conclusions: almost all the clients reported an increase in their incomes which has improved their standard of living, have sent their children to school; have been able to pay for their medical bills and can feed their families, can cope with future crises using their savings, have been empowered economically and their positions in the family as well as in the society. The researcher recommended the institution to improve in training and equipping its clients with necessary business skills relevant for successful loans.

Date

2023

Publisher

BUSE

Keywords

Microfinance

Financial inclusion

Poverty

Supervisor

N/A