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Item Effects of Social Capital and Microcredit on Profitability of Grain Traders in Southwestern Nigeria(2014) Durojaiye, A. M.Grain marketing requires considerable investment of fund but traders are often plagued with inadequate capital to run their enterprises. The inadequacy of fund prevents traders from expanding their businesses resulting in low profit margin. However, social capital is increasingly recognised as a bridge for the gap in credit availability which can help in business expansion and profitability. There is little empirical evidence on the extent of the effectiveness of social capital and microcredit delivery in profitability of traders. The study was designed to investigate the effects of social capital and microcredit on profitability of grain traders in southwestern Nigeria. Multistage sampling procedure was employed for the study with random selection of Oyo and Ogun states from the six states in southwestern Nigeria. Two Local Government Areas (LGAs) were then randomly selected from the states. Eleven rural and twelve urban markets were randomly chosen in each of the LGAs based on Probability Proportionate to Size (PPS). Finally, 500 grain traders were sampled using PPS, with 492 traders having detailed information used for the analysis. Data were collected on grain traders’ socio-economic characteristics, membership density, Meeting Attendance (MA), heterogeneity, Decision Making (DM), Cash Contribution (CC), Labour Contribution (LC), trust, social cohesion, Time Lag (TL), Payback Period (PP), credit distance as well as costs and returns. Data were analysed using descriptive statistics, multinomial logit, budgetary analysis, ordinary least square and two- stage least square regression models at α0.05. Age and household size were 43.3 ± 9.4 years and 6.0 ± 2.9 respectively. Density of membership in associations was 3.0 ± 0.1. Average MA by traders was four out of five. Membership of the association was diversified with heterogeneity index of 69.9%. Members participated in three out of five decisions made by the associations. The six microcredit sources identified were Traders’ Association (TA); community association; cooperative society; Rotating Savings and Credit Association (ROSCAS); Friends and Relatives (FR) and Microfinance Bank (MB). Total revenue was N496, 135.80 while net revenue was N12, 359.00. Average amount of credit granted from the six identified sources was N67, 480.13 ±6, 764.80 representing only 46.0% of the total credit needs of the traders. The TL for credit was 2.13 ± 2.00 weeks with a PP of 6.51 ±4.17 months. Payback period decreased the likelihood of access to credit in TA, ROSCAS, FR and MB ranging from 61.5% to 84.5%. Credit distance increased credit access in TA (2.81) and ROSCAS (1.93). Interest charged decreased credit access in TA (-2.40) and RF (-3.38). Trust and heterogeneity indices increased credit access in ROSCAS by 77.5% and 99.2% respectively. Increase in time lag reduced profitability of the grain traders (-0.0235) while social capital increased profitability by 12.1%. Social capital increased access to, and the amount of credit available, which improved profitability of grain traders. Therefore, social capital formation with its attendant implications for improved access to microcredit should be encouraged.Item Gender Dimension of Social Capital and its Effects on Rural Household Welfare in Osun and Ondo States, Nigeria(2012) Agboola, T. O.Social capital is trust and willingness to live by the norms of one’s associates. This household welfare asset has the potential to break the poverty cycle. However, there is little evidence on gender sensitivity of the effect of social capital on welfare status in Nigeria. Hence, gender dimension of social capital and its effects on rural household welfare in Osun and Ondo states, Nigeria were investigated. A multistage random sampling technique was employed for the study. Osun and Ondo states were selected from the six states in Southwestern Nigeria. Eight Local Government Areas (LGAs) were selected from each state. Thereafter, five communities were selected from each LGA. Three hundred and seventy respondents were selected from all the communities based on probability proportionate to size. Data were collected using structured questionnaire on socio-economic characteristics and social capital dimensions; group and network; trust and solidarity; Social Cohesion and Inclusion (SCI); collective action and cooperation; Information and Communication (IC); and Empowerment and Political Action (EPA). Attendance at associations’ meetings is the number of times present on monthly basis. The mean per capita household expenditure was used as a proxy for welfare. Data were analysed using descriptive statistics, multiple and Tobit regressions at p= 0.05. Male Headed Households (MHH) constituted 51.3%. Mean age of MHH and Female Headed Households (FHH) was 44.1 ± 2.2 and 42.3 ± 1.2 years respectively. The mean household size was 6.2 ± 2.3 and 5.1 ± 1.4 for MHH and FHH respectively. Average meeting attendance by both sexes was two out of five. Density of membership index in association was 0.30 and 0.34 for MHH and FHH respectively. MHH had 0.73 index of participation while FHH had 0.58. FHH were more involved in IC (0.69) compared with MHH (0.46). The SCI index was 0.47 for MHH and 0.65 for FHH. Male household heads had higher EPA (0.67) compared with FHH (0.21). On the average MHH participated in three of five decision- making and two for FHH. Monthly cash contributions of male and female heads were N895.90 ± N55.37 and N985.67 ± N72.11 in 2007 respectively. Monthly average labour contributions for MHH and FHH were 2.4 ± 0.3 and 3.2 ± 0.1 mandays respectively. There was no significant difference between MHH monthly per capita expenditure (N2, 936.67 ± N143.43) and FHH (N3, 221.82 ± N104.10). Aggregate social capital enhanced welfare of MHH and FHH by 0.503 and 0.681 respectively. Meeting attendance reduced welfare for both sexes by 0.258. Participation in decision- making increased welfare of MHH and FHH by 0.714 and 0.812 respectively. Increase in household size reduced welfare for both sexes by 0.782. Increase in age reduced welfare of MHH and FHH by 0.225 and 0.319 respectively. Increase in level of education increased welfare of MHH (0.123) and FHH (0. 913) indicating that female benefit more. Social capital influenced welfare of female headed households more. Participation in decision- making, and level of education enhanced households` per capita expenditure. Household size, meeting attendance and age negatively affected households’ welfare.Item Effect of Social Capital on Rural Household Welfare in Southwestern Nigeria(2013) Adepoju, A. A.Rural household welfare remains low in Nigeria, as the traditional capital (physical, natural, human and financial) has not fully led to its improvement. There is increasing shift of attention to social capital as an element that explains household welfare. The nexus between social capital and rural household welfare in southwestern Nigeria has not been fully examined. The effect of social capital on rural household welfare in southwestern Nigeria was therefore investigated. Multistage sampling technique was used. Oyo and Ekiti states were selected from the six states in southwestern Nigeria based on their poverty profile (the least poor and the poorest). Six rural Local Government Areas and thirty-two communities were selected from the two states based on probability proportionate to size and sample size of 298 was used for the analysis. Data were collected on household demographic characteristics such as age, education and household size, expenditure profile and social capital dimensions: Membership Density (MD), Decision Making (DM), Meeting Attendance (MA), heterogeneity, Cash Contribution (CC) and Labour Contribution (LC). Data were analysed using descriptive statistics, ordered probit, ordinary least square, two-stage least square and control function regression models at p=0.05. Ninety three percent of the households were headed by male. Mean age, years of formal education and household size were 48.3 ± 11.7 years, 8.4 ± 6.3 years and 6.1 ± 2.6 respectively. Average MD and DM in association were 4.5 ± 2.1 and 24.7 ± 13.2. Households attended four out of every five meetings scheduled. Diversification of membership measured by heterogeneity index was 21.7 ± 16.4 while annual CC and LC to association were N7,412.95 ± N9,757.73 and 54.6 ± 18.4 mandays respectively. Membership in religious group accounted for the highest proportion (77.3 percent) while recreational club accounted for the lowest (4.67 percent). The highest Welfare Tercile (WT) had monthly mean per capita expenditure of N9,135.98 N4,014.35 which was four times the value for the lowest WT (N2,239.82 N958.33). The maximum CC to associations was recorded by the highest WT (N9,756.90 ± N12,358.25) while the lowest WT had the maximum LC of 24.7 ± 20.2 mandays. Majority of the households (78.0 percent) benefited from access to information on market outlets and share of risk/shocks while 55.5 percent had access to land. Low educational level reduced benefit derived from social group by 0.027, while being a farmer (0.404), LC (0.016) and DM increased benefit received from social group. Household welfare reduced with increase in age (-2.965), being married (-2.965), household size (-0.398), being a farmer (-1.676) and LC (-7.5x10-4). Conversely, age squared, education and DM index increased household welfare by 0.2 percent, 10.8 percent and 2.8 percent respectively. Aggregate social capital index increased household welfare by 9.5 percent, while controlling for non-linear interaction of social capital with unobservable variables further increased the effect of social capital by 13.1 percent. Decision making and aggregate social capital improved household welfare while labour contribution reduced it. A bi-causality relationship existed between social capital and household welfare.