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Social Capital Dimension and Demand for Microcredit among Rural Farm Households in Kwara State, Nigeria

S. O. Oladeji
M. K. Lawal
C. P. Adekunle
E. T. Tolorunju
A. S. Coster


This study assessed the influence of social capital dimension and demand for credit among rural farm households in Kwara State, Nigeria. A multistage sampling technique was used to select 94 microcredit beneficiary rural farm households in the study area. Data were obtained on socio-economic characteristics, social capital variables, and microcredit use with the aid of a well-structured questionnaire. Respondents' social capital was assessed by the construction of a set of indices which includes; participation in decision making, heterogeneity of membership, cash contribution, labour contribution and density of membership indices. Data were analysed using descriptive statistics and multinomial logit. The average age of the respondent was 42.7years, household size of about 7persons. 80% of the respondents were male. Multinomial logit regression revealed that the likelihood of sourcing credit from banks, cooperatives and friends and family or money lenders is significantly (p<0.05) higher among the married; and rises significantly (p<0.05) with an increase in heterogeneity and decision making participation indexes. Also, the likelihood of sourcing credit from government agencies increased (p<0.01) with household size. The study thus, concluded that microcredit and social capital had a significant impact on rural household's poverty eradication. The study recommended that households should be encouraged to participate more in social groups and therefore the households should be sensitized to the need to adopt birth control policy.