The Role Of Microcredit In Increasing Household Incomes In Kafue District,zambia.

Microcredit is a growing phenomenon globally as it plays an important role in improving the livelihoods of poor people through increasing household incomes.However,it is not in all circumstances that microcredit achieves its intended goal.This study examined the effects of microcredit on household income in Kafue district,Zambia.A multistage sampling procedure was employed to get 206 respondents stratified into microcredit users.While 8 key informants from Microfinance Institutions and Ministry of Community Development participated in the survey.Data were collected and analyzed using descriptive statistics and the multiple regression analyses were also used to assess the impact of microcredit in increasing household incomes.Statistical Package for Social Sciences(SPSS;Version 21.0)was used to analyze the data.The findings of the study revealed that the effects of microcredit on consumption varied among households where 56.8 % indicated an increase,41.7% indicated a decrease while 1.5 % stated no effect in consumption.The effects of microcredit on income also varied among households 49.0% of households recorded an increase in income,45.6% recorded no change in income while 5.3% stated their income had decreased after getting the loan.The findings from Regression Analysis revealed that,variables that had a significant impact on how microcredit affected income were marital status,age,level of education,household size,training;saving and duration of borrowing.However,three variables,sex of respondent,number of meals and loan interest rate were insignificant.The study concluded that the effect of microcredit on income depends on how the households utilize their loan.For those that prioritize consumption(food and clothing expenditure),microcredit will not result in increased household income.On the other hand those households that prioritize investment stand a better chance of generating new sources of income,repaying the loan and breaking out of the poverty cycle.