The role of rural micro credit in reducing household vulnerability to food insecurity: Case study in Bati Woreda, Oromo Administrative Zone, Amhara Region, Ethiopia

Abstract

Households residing in the two sample Kebeles of Bati were stratified based on their participation in Amhara Credit and Saving Institution (ACSI) as ex-clients, clients, eligible non-clients, and ineligible households. A total of 170 sample households, comprising 108 clients of ACSI and 62 non-clients, were finally selected from the two sample Kebeles using simple random sampling with probability proportional to size. The proxy indicators utilized to measure households' vulnerability to food insecurity were, households own food production, income, asset, crop and income diversification. The survey results had indicated that the annual mean income obtained by ASCI clients was higher than the annual mean income of the non-clients by 52%. Moreover, as compared to non-clients, larger proportions of ASCI clients have participated in more remunerative income sources i.e. high value crop production, sheep and goat production/ fattening, beekeeping and petty trade. Among the variables examined, family size, number of economically act/Ve members of the household, farm size, livestock holding, and participation in ACSI credit program are positively correlated with households' income source diversification. With regard to asset ownership, clients owned larger number of livestock, and a sizable of non-productive assets with relatively higher estimated value, as well as, more cash savings. Furthermore, the level of rural households vulnerability to food insecurity is negatively associated with their participation in ACSI program.