MICROFINANCE SERVICES AND AGRICULTURAL PRODUCTIVITY: A CASE STUDY OF SMALL SCALE FARMERS IN AFGOI TOWN, AFGOI DISTRICT- SOMALIA

ABSTRACT 

The study assessed the Relationship between Microfinance Services and Agricultural Production in Afgoi District in Somalia. The objectives of the study included: To find out the profile of respondents in terms of age, sex, marital status, and educational level; establishing the extent and efficiency, and effectiveness of microfinance services: determining the degree of agricultural productivity, and establishing the relationship between microfinance services and agricultural productivity in Afgoi, Somalia.

The study employed a survey research design. However, emphasis was drawn to the exploratory research design to be able to focus on perceptions, facts. feelings, experiences and emotions or respondents where simple random sampling technique was used to get the sample size which required collecting information through questionnaire, interviews and a total sample size of 92 informants was interviewed from a survey population of 120 people. This size was more preferable due to time limit, the resources available to carry out the research and it was also used to ensure accuracy in data collection and data was analyzed quantitatively and qualitatively in form of tables, figures (pie charts) and conclusion were drawn at the end.

The major findings of the study as that up to about 90% of the respondents revealed that there existed a mutual relationship between the level of Microfinance Services and Agricultural Production in Algoi District in Somalia although it was later realized through the interpretation that there existed no relation between the two variables.

Recommendations were that microfinance institutions should ensure that; the business skills training component be a prerequisite to micro entrepreneurs before and after accessing other components of microfinance and the incentive of increasing the size of loan in subsequent loan cycles to micro entrepreneurs who service the previous loan promptly should be maintained among the few.

In conclusion. therefore, microfinance Services have greatly contributed towards Agricultural Productivity. However, micro entrepreneurs should make a number of suggestions for the improvement on the delivery end utilization of microfinance services with the campaign to revive the co-operative societies, and the ministry concerned should take on initiative of mobilizing and guiding farmer micro entrepreneurs to form Savings and Credit Societies of their own using the accumulated savings. This will enable the farmers to set favorable conditions governing their credit societies.