MICROCREDIT SCHEME’S (MICROFINANCE) IMPACT ON THE AGRICULTURAL EXTENSION ACTIVITIES

Abstract

The present research examines the Microcredit Scheme’s (Microfinance) Impact on The Agricultural Extension Activities: A Case Study of District Abbottabad, Khyber Pakhtunkhwa, Pakistan. Many studies have shown that the availability of banks and the agricultural loan has a positive relationship with the agricultural extension. The study deals with the rural sides of Abbottabad, where farmers hold small scale lands and engaged with agricultural activities and spending the return on the wellbeing of family and children’s education. For the study, the theory of Human Capital was selected, and it stated that the loan helps the farmers to enhance their human capital. The quantitative research approach was chosen. The study was conducted in the rural areas of Abbottabad. The selection of respondents was done with the help of banks, with the prior permission of bank beneficiaries. After identification of respondents, the simple random sampling technique was adopted to reached respondents. The closed-ended questionnaires were designed in the English language and the majority of farmers were illiterate, so that is why the face to face interviews have been conducted with respondents. The total sample was limited to one hundred and forty (140) both males and females. The Statistical Package for Social Sciences (SPSS) was used as a data analysis tool. Both descriptive and inferential statistics were used where the hypothesis was tested through correlation after means score. The findings of the research showed that microfinance banks are available in the rural sides as well as in the city of Abbottabad where farmers have access to microloan. Some banks and cooperative societies are lending money in a group loan where no need to guarantee or mortgage. These microfinance banks have led loan from 20000 to 150000 on an individual basis. The complete age of loan is one year, and respondents were depositing monthly instalment. With the help of these loans, farmers have purchased some fertilizers and extension the cannel and waters channels. Moreover, the loan makes bale the farmers to bear the transport cost to send agricultural materials to cities. Many farmers with the help of motorbike carry daily use an agricultural product like apples and other perishable materials to main cities. The results of the inferential statistics also showed that there is a relationship or correlation between the availability of microcredit and agricultural extension among the small farmers. Some respondents have stated that the interest rate is high. The Govt needs to help these small farmers so that they will increase their level of production and enhance their overall livelihood. Keywords: Microfinance, Agricultural Extension, District Abbottabad, SPSS, Correlation, Livelihood