Impacts of Micro-credit on Household Economics

Abstract

This research was conducted to investigate the impacts of micro-credit on local household economics in Prek Norin Commune by focusing on people who took a loan from microfinance institutions and continue to use it. This study mainly focuses on three objectives, socio-economic factors of households using credit, the status of using micro-credit and effects of micro-credit on household economics. Data were collected via survey, using face to face interviews with a hundred and forty two household heads. Simple random sampling method was used to select the samples from two villages (Prektachreng and Prek Krouch) in Prek Norin Commune, Ek Phnom district, Battambang province. Therefore, the accuracy of the analysis heavily relies on the data provided by interviewees. The result of this study revealed that those using micro-credit have better living standards than before because of income and asset growth. In addition, using micro-credit also creates more job opportunities and variety of economic activities, provides more jobs for women, and improves household education, women's status, and family welfare. It also reduces income inequality in the villages. However, micro-credit has negative impacts on people's feeling because most people are more concerned about paying back the loan.