The Role of Microfinance in Strengthening Pastoral Household Food Security A Comparative Study between Beneficiaries and Non-Beneficiaries of Microfinance Services in Dollo Ado and Filtu Districts of Somali Region
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Date
2006-06
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Addis Ababa University
Abstract
Microfinance is the provision of financial services to low income households
and self-employed clients (Ledgerwood, 1999). Pro viding microfinance
services to pastoral households is one aspect of promoting food security. It
contributes for income generation and smoothing consumption. This study
investigated whether there are sigmficant differences in income,
expenditures on food and non-food items, food consumption, child schooling
and coping strategies between microfinance service beneficiary and nonbeneficiary
households in Filtu and 00110 Ado districts of Somali region.
Equal numbers of beneficiary and non-beneficiary households (57
households each) were included in the sample.
The research findings indicated that, microfinance beneficiaries have more
diversified incomes than the non-beneficiaries. Furthermore, these
households had more income relative to non-beneficiaries. As a result,
households' access to microfinance services had higher monthly food and
non-food expenditures than non-service users. This indicates that, the
former households have better purchasing power than the later. Thus, they
have shown better calorie consumption.
Access to microfinance services enabled beneficiary households to increase
their incomes. The increased income helped beneficiaries to spend more on
child education than non-beneficiaries. More importantly, the beneficiary
households have employed less coping strategies during food shortages,
which imp01 that, adequate food at their disposal. The result also shows
that, the severity of responses on the ufllization of coping mechanisms has
more pronounced to non-beneficiary households. Finally, pastoralist oriented
microfinance service reduces vulnerablltty and minimizes the risk of
becoming food insecure.
Key words: Microfinance, Food security, Coping strategies, Household
income, Food expenditure, and Food consumption
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Keywords
Microfinance, Food security, Coping strategies, Household income, Food expenditure, and Food consumption