Examining the Effectiveness of Microcredit Schemes in Improving the Socio-Economic Status of Small Dairy Farm Entrepreneurs

Abstract

Pakistan is an underdeveloped country, and most of its population lives in rural areas. Therefore, rural areas are the country's primary economic development and labor source. Rural development, in addition to the development of agriculture, also includes the development of the dairy industry, tiny dairy farms, and the betterment of rural communities. This study aims to determine the Impact of Microcredit on the socio-economic status and living standards of farmers in rural areas of Khairpur Mirs district. The respondents of this study are small dairy farmers who have obtained livestock/small dairy farm loans from microfinance banks operating in the Khairpur Mirs district. The sample of 334 respondents was selected from the target population using a simple random sampling technique—a survey conducted to collect data from small dairy farmers. A close-ended structured questionnaire with a 5-point Likert scale from strongly agree to disagree strongly was developed. Through analysis, the study clearly showed that microfinance banks positively improved the socio-economic status of small dairy farms after obtaining small loans.Furthermore, the study found that microfinance banks positively changed and improved the respondents' children's living standards, dietary habits, health status, and education. Standardized multiple regression analysis is used to test the hypotheses proposed in the study and verify the relationship between the variables. The results of the analysis show that Microcredit has a significant impact on improving the socioeconomic status and living standards of small farmers.

Keywords: microfinance, dairy farmers, living standards, Microcredit, health status, dietary habits.