Evolution, performance and role of traditional credit system on poverty reduction: a case of Ifogong’ho of the wasukuma, Tanzania

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Date

2007

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Sokoine University of Agriculture

Abstract

A study on ifogong’ho traditional credit system was conducted in Magu District, Mwanza region, Tanzania. The general objective of the study was to explore the contribution of ifogong’ho to poverty reduction. Specifically, the study aimed at describing the evolution and operational procedure of ifogong’ho; assessing performance of ifogong’ho as indicated by repayment, interest and default rates; assessing accessibility to ifogong’ho by age, gender, education, household type and wealth; and determining the contribution of ifogong’ho credit to poverty reduction using income, food security and health indicators/A cross-sectional survey approach was employed, whereby four villages that practice ifogong’ho were selected purposively and respondents were selected randomly. Semi-structured and structured questionnaires were administered to ifogong’ho committee members and 131 respondents, respectively. Likert scale questions were employed to determine attitude of members towards access to ifogong’ho by sex, age, household type, education and wealth. Data were analyzed using the Statistical Package for Social Sciences whereby frequencies, percentages, means and cross-tabulations, were used to elaborate analytical results. Qualitative data were summarized and presented in tables to supplement ifogong’ho important information. The chi-square test statistic was used to determine attitude of ifogong’ho members towards ifogong’ho access and sex, age, household type, education and wealth. Results showed no statistical significant relationship between access to ifogong’ho and sex, age, household type, education and wealth of respondents. The t-test results at p < 0.05 level of significance proved that net income, food security and health expenditure among ifogong’ho members beforeiii getting credit differed significantly after using credit. Net income, food security and health expenditure after credit were higher than those before credit. These results substantiated the need of credit for poverty reduction. The study came up with pertinent recommendations. One of the recommendations given was to boost ifogong’ho fund portfolio size by introducing saving practice in the system.

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Keywords

Ifogong’ho traditional, Poverty reduction, Gender, Health indicator

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