The role of micro-finance institutions in alleviating poverty among small scale farmers in Kenya: evidence from small-scale wheat farming in moiben division, uasin gishu county

This paper explores the role of micro-finance institutions in alleviating poverty among small-scale wheat farmers in Kenya. The paper discusses the utilization of loans from micro-finance institutions by small scale farmers in growing wheat to illustrate how farmers improve their living standards and to a large extent alleviate poverty among themselves. The paper uses data obtained in a six-months study carried out in five locations in Moiben Division, Uasin Gishu County, Rift Valley Province, Kenya. The data to which this paper is based were collected through survey method, Focus Group Discussion (FGD), informant interviews, observation, and secondary sources. A total of 200 small-scale wheat farmers selected using simple random sampling participated in this study. The data obtained were analyzed both qualitatively and quantitatively. The paper argues that although micro-finance institutions provide small-scale wheat farmers with opportunities to acquire loans, the loan amount being offered is inadequate for wheat production given the fact that wheat production mainly uses capital intensive technology. As a result, small-scale farmers use low quality seeds, fertilizers and chemicals which result into low yield, low revenue income and consequently low standard of living. The paper concludes that investing loans from micro-finance institutions in small-scale wheat production does not result in sufficient income revenue; hence tend to promote and not alleviate poverty.