Abstract:
This study presents the results on the impact assessment of credit under Kagera
Agricultural and Environmental Management Project (KAEMP) on rural livelihoods of
smallholder farmers in Misenye district, Kagera region. The general objective was to
assess the impact of agricultural credit under KAEMP on smallholder farmers’ rural
livelihoods. The specific objectives were to identify socio-economic factors within the
project environment that influence the use of credit, assess the use of improved agricultural
inputs between borrowers and non-borrowers and finally analyze livelihood changes
resulting from the use of credit by smallholder farmers. Both primary and secondary data
were collected using information search and survey. The main instruments for data
collection were two structured questionnaires. The data collected were summarized and
analyzed by using Statistical Package for Social Sciences programme (SPSS). It was
revealed that the number of active family members and the income from off-farm income
generating activities were the socio-economic factors which contributed largely to
discriminate borrowers and non-borrowers. Moreover, the results show that there was a
significant difference in the use of type of labour and modern agricultural inputs especially
for dairy cattle keepers between borrowers and non-borrowers implying that credit
influenced the use of modern inputs. In the case of livelihood indicators, results obtained in
this study show significant difference on farmers’ livelihood between borrowers and non-
borrowers especially on housing materials used, livestock owned, value of household
assets, farm tools used and farm and off-farm income entailing that credit influenced the
improvement in rural livelihood. Basing on these findings, it is therefore concluded that all
efforts be made to make agricultural credit effective since rural livelihoods can be
improved by agricultural credit provision and hence alleviate poverty in the rural areasiii
where poverty is predominantly regarded as a rural phenomenon and subsistence
agriculture is a major economic activity.
