Contribution of Microfinance to Households’ Economic Wellbeing
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Abstract
The ability of microfinance and microcredit programmes to alleviate poverty and increase household income levels is often debated and questioned. The thematic thrust of this research is to analyse the factors affecting the household income levels in Bulawayo Province, Zimbabwe” for the period 2009 to 2019. Lately, the microfinance field has become popular due to the increase in businesses that are operating in the informal sector. This study investigated the effect of microfinance loans on household income in Bulawayo Province of Zimbabwe using a representative sample of 200 households. A quantitative research method was used in this study in the way of household survey questionnaires. The Tobit model was used to analyse the sample data of this study and the findings were that education level and value of household assets are the only significant variables affecting household income. The study revealed that there is a significant and positive relationship between household income and education level of the household head. Education level, and household assets also play an important role in determining the wellbeing of people. The main recommendation from this study is that the government of Zimbabwe should explore ways for improvements in the access to education for all and also improvements in quality of education.
Keywords: Microcredit, Microfinance, Bulawayo Province, Household Income, Tobit Model
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