IMPACT OF MICRO CREDIT ON POVERTY ALLEVIATION SCHEME
1.0 BACKGROUND FO THE STUDY
the level of poverty has increased in Africa and inNigeriasince the implementation of the Structural Adjustment Programme in the ‘80s (UNDP Nigeria, 1998; World Bank, 1999). Data from the Federal Office of Statistics (FOS) on poverty profile inNigeria(1999) showed that the incidence of poverty increased from 28.1% in 1980 to 43.6% in 1985 but declined to 42.7% in 1992 and rose again to 65.6% in 1996. Since 1990, the country has been classified as a poor nation.
For the period 1980 to 1996, the population of poor Nigerians increased fourfold in absolute term. The percentage of the core poor increased from 62% in 1980 to 93% in 1996, whereas the moderately por only rose from 28.9% in 1992 to 36.3% in 1996. The proportion of total income spent on food by the core poor and moderately poor was approximately 75% and 73%, while the non-poor category spent about 53% of their total income on food (FOS, 1999).
The analysis of the depth and severity of poverty inNigeriashowed that rural areas were the most affected. Several reasons accounted for this situation; the large concentration of the populace in the rural area, many years of neglect of the rural areas in terms of infrastructural development, and lack of information on the way government is being run. The CBN/World Bank study on Poverty Assessment and Alleviation inNigeria(1999) attested to the fact that the living and environmental conditions of those living in the rural areas have worsened. Urban poverty is also on the increase in the country. This has been attributed to the under provision of facilities and amenities which are inadequate to match the growing demand of the urban populace as well as the rural-urban movement which has caused serious pressure on the existing infrastructural facilities.
Concern about the problem as well as efforts made to reduce it cannot be said to be new. However, while major reductions in poverty level have been in the developed countries, the same cannot be said regarding the undeveloped countries of the world. Indeed, Sub-Saharan Africa has been characterized as being among the poorest regions of the world. Poverty in the region has increased due to global economic policies political instability, civil wars and Structural Adjustment Programme (SAP) among others. About 250 million Africans (about 45 percent) of the population are poor (World Bank, 1996). In rural areas, where most Africans live, the situation is worse. The high poverty level in Sub-Saharan Africa has been attended by the decline in per capita income, wages and employment in the surroundings of the population pressures, fragile national resources and weak institutional financial structure (Afonja, 1996).