THE IMPACT OF MICROFINANCE PROGRAMME PARTICIPATION ON HOUSEHOLD FOOD SECURITY IN MALAWI

Year 2020, Volume: 12 Issue: 1, 204 - 222, 30.06.2020

Miss Tikhala Chilimba Hannah Dunga Chengedzai Mafini

https://doi.org/10.34109/ijefs.202012113

Cited By: 4

Abstract

This article empirically examines the impact of microfinance programme participation on household food security in Malawi. There has been an increase in the role of micro activities such as microfinancing that target the poor, vulnerable, and marginalised people in development agendas. This makes it essential to assess the effect of micro activities, for example, microfinance programmes on welfare indicators such as food security. The study used cross-sectional data that was collected in Malawi for the Third Integrated Household Survey in 2010-2011. It employed the Heckman Selection Model, which was deemed applicable since the selection to participate in credit programmes is typically non-random. Total real annual consumption per household was used as a proxy to capture household food security. The results of the study indicate that females contribute more to the food security state of a household than males. It also established that education level significantly and positively contributes to the state of household food security. Lastly, the study established that households that participated in microfinance programmes experience improvements in their status of food security. In light of this, it recommends that policymakers expedite the operationalisation of microfinance programmes with the intent to increase participation by improving policies such as the Microfinance Policy and Action Plan (2002). There should also be an increase in adult literacy programmes and development of microfinance institutions that target women.

Keywords

Agricultural sector, microfinance, food security, household

References

• Annim, S. K., & Alnaa, S. E. (2013). Access to microfinance by rural women: Implications for poverty reduction in rural households in Ghana. Research in Applied Economics, 5(2), 19.
• Aidoo, R., Mensah, O. J., & Tuffour, T. (2013). Determinants of food security in the Sekyere-Afram plains district of Ghana. Kumasi: Kwame Nkrumah University of Science and Technology.
• Benoit K. (2011), Linear regression models with logarithmic transformations, 17 March, 2017, www.kenbenoit.net
• Carman, K. G., & Zamarro, G. (2016). Does financial literacy contribute to food security? International journal of food and agricultural economics, 4(1), 1–19.
• Chirwa, E. W. (2002). Microfinance and poverty alleviation in Malawi: What Has happened to the microfinance revolution? Zomba: University Of Malawi.
• Diagne, A., Zeller, M., & Mataya, C. (1995). Rural financial markets and household food security: impacts of access to credit on the socio-economic situation of rural households in Malawi. University of Malawi, Bunda College of Agriculture, Rural Development Department.
• Department of Disaster Management Affairs (DoDMA). (2015). Malawi: Food Security. DoDMA.
• Dunford C, (2013), Karonga vulnerability study: assessing the impact of community managed microfinance in Malawi. Oxford: Oxford University.
• FAO. (2008). Nutrition country profile. Nutrition and Consumer Protection Division.
• Dunga & Dunga (2017) Coping strategies among the food-insecure household in Malawi, a case of female and male-headed household in South Eastern Malawi. International Journal of Social Sciences and Humanity Studies. 9(1), 91-107.
• FAO. (2015). Country fact sheet on food and agriculture policy trends. Washington DC: Food and Agriculture Organization of the United Nations.
• Gujarati, D. N. (2004). Basic Econometrics. USA: McGraw-Hill.
• Hulme D., & Mosley P. (1996), Finance against poverty, Vol. 2, Cornwall: T.J Press.
• Kwataine M. (2002), Influence of micro-credit on rural household food security in Zomba. MA thesis, Chancellor College, Zomba.
• Masanjala, W. H. (2002). Can the Grameen bank be replicated in Africa? Evidence from Malawi. Journal of Development Studies, 89.
• Masanjala, W. (2006). Cash Crop liberalization and poverty alleviation in Africa: Evidence from Malawi. Journal of Agricultural Economics, 233.
• Mutisya M, Ngware M,Kabiru C, Kandala N. B. (2016), The effect of education on household food security in two informal urban settlements in Kenya: A longitudinal analysis. Open Access, Kenya.
• MCC. (2004). Microfinance sector assessment in the Republic of Malawi. USAID Contracting Vehicle: AMAP Microfinance IQC.
• National Statistics Office. (2012). Third Integrated Household Survey (IHS3). Zomba: National Statics Office.
• Pakrashi, D, Maitra, C., & Islam, A. (2014). Micro credit program participation and household food security in rural Bangladesh. Journal of Agricultural Economics, 63.
• Sachs, P. J. (2012). From millennium development goals to sustainable development goals. The Lancet, 66.
• Shaw A., & Nagarajan G. (2011). Effects of savings on consumption, production and food security, evidence from Rural Malawi, University of Maryland.
• World Bank. (2008). Malawi country brief. Washington DC: World Bank.
• World Bank (2017) New Policies to Help Transform Malawi’s Agriculture Sector. https://www.worldbank.org/en/news/feature/2017/01/31/new-policies-to-transform-malawi-agriculture-sector. Accessed 2019/7/15.
• World Bank (2019) Agriculture and Food Security in Malawi. https://www.usaid.gov/malawi/agriculture-and-food-security. Accessed 2019/7/15.