An assessment of the effects of micro finance credit on public service workers: a case study of Lusaka province.

This study sought to assess the effects of microfinance credit on public service workers. The study was conducted in Lusaka province, with an extension of one district in Central Province. The study adopted a mixed research approach and used a concurrent nested research design. The data used in the study was collected using a mixed research approach through a survey and in-depth interviews. Data analysis was done using statistical packages for social sciences for quantitative data and a thematic approach for qualitative data. Regression, correlation, and analysis of variance were the main empirical analysis approaches for the quantitative data. The results have established a negative but insignificant effect of microfinance institution loans on the livelihood of households. The control variables of family size and salary scale also produced insignificant results. The study identified loose collateral requirements, less paperwork, and quick access to money as the factors that influence the preference of microfinance institution loans over bank loans by households. Despite the move to
utilise more microfinance institution loans than bank loans, the study identified challenges that public service workers face when accessing loans from microfinance institutions. Long-distance coverage was one of the main challenges identified. Other challenges include poor access to internet facilities
and low-income levels. The study therefore recommended that the government should improve the operating environment for microfinance institutions in order to attract many microfinance institution formations. This may reduce the long-distance challenge identified in this study. In addition, the study
prescribed that microfinance institutions need to standardise their loan policies countrywide in order to attract many public service workers. The study also identified the need to set policies that would restrict borrowing from microfinance institutions. This will reduce overborrowing and, thus, the
extent of loan defaults. Finally, the study recommends that other researchers extend the study to other sectors and improve the contribution to the body of knowledge on the subject matter.