The Effect of Credit Volume on Poverty Alleviation: A Case Study of the Shell Petroleum Development Company's Microcredit Delivery in Delta State, Nigeria

Alakpa, S. O. E.
January 2014
Middle East Journal of Scientific Research;1/3/2014, Vol. 19 Issue 2, p268
Academic Journal
Case Study
The study assessed the effect of Credit Volume on Poverty Alleviation: A case study of The Shell Petroleum Development Company's (SPDC's) micro-credit delivery in Delta state, Nigeria. A random sample of 519 respondents and 10 NGOs involved in the implementation of the programme were sampled. Data were analyzed using descriptive statistics and logistic regression. Results revealed that the modal (38.2%) credit volume accessed by respondents was N50,001-100,000 (about $320-637). Using the relative poverty line of N149,547.13 (about $953), most participants (70.3%) were non-poor, while 34.6% of the non-participants were non-poor. Participants agreed that participating in the scheme had empowered them socially especially in the area of leadership development (mean=3.41) and enhanced self-confidence. Major challenges facing the effectiveness of the scheme operations included mismanagement of fund by the Scheme Management Committee (SMC) (mean=2.50), loan default (mean=2.75), delay in release of fund/credit (2.68), small loan sizes (2.56), delay in the payment of service charge by SPDC (mean=4.00), difficulty in accessing communities (3.67), poor commitment to duty by NGO staff (3.44). Education (b=0.041), access to non-SPDC credit (b=0.746) as well as participation in SPDC micro-credit scheme (b=1.47) had positive and significant influence on small-scale farmers' likelihood of being non-poor. Appropriate monitoring of SMC by the implementing NGO and providing adequate logistics to improve NGO's service delivery were recommended.


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