The Impact of Helat Koko Branch of Agricultural Bank of Sudan Microfinance on Small Farmers in Khartoum state

Abstract

This study aimed to assess the impact of microfinance, which was distributed by Agricultural Bank of Sudan (ABS), Helat Koko branch on small farmers. To achieve this goal, descriptive statistics and crop budget analysis were used to analyze data that were collected through field survey for the seasons 2007-2008, and 2008-2009. The study selected 56 farmers at random to represent the sample size. Statistical analysis revealed that, the majority of the farmers were in active age group, married, and literate. The study showed that the microfinance has succeeded to some extent in integrating new clients to the formal financial system and it succeeded in increasing the area under crop for farmers, number of the animals’ owned by farmers, and farm income. The crop Budget analysis showed that the Abu 70, okra and Alfalfa crops were more profitable than wheat. One of the findings of the study is that the positive effect of political interference which was take place by the Ministry of Agriculture, Animal Wealth and Irrigation was that Agricultural Bank of Sudan provides insurance for wheat farmers, and buys the crop from farmers, but it had determined growing wheat as a requirement to have insurance as policy for wheat habitation in the Khartoum state. This policy leads to low wheat productivity and negative profit of wheat to the farmers. Accordingly, the study recommended that, the Bank should expanding in the spread of microfinance culture through advertisement on television and radio, increases the ceiling of the loan with existing of personal guarantee as requirement of microfinance to enable the farmers expansion in cultivated areas and increase in the number of animals, the ABS should provides agricultural services, such as extension, crop protection to help increase the productivity of crops. Isolation of agricultural microfinance from political interference to succeed agricultural microfinance. And that there has to be more researches and studies on the level of agricultural financial institutions and the clients' level.