Abstract:
The study was conducted to analyze the effects of village bank programme on household income
in Vulamkoko village in Katete district Zambia. A cross sectional study design was used and a
purposive sampling technique was used to obtain the data. Data were obtained using the
structured questionnaire, two focused group discussions in Kadula and Chimutende and some indepth
interviews with key informants .The sample size was 100 households and 50 constituted
the non-village banking members, which was the control group, the other 50 was village banking
members. This paper found that household credit has a significant and positive relationship with
household per capita expenditure and per capita nonfood expenditure. Moreover, household
credit has a greater influence on poor households, in comparison with better-off households. The
relationship between household borrowing and per capita food expenditure, however, turns
negatively. These findings confirm that providing microfinance to the poor is an effective policy
tool to reduce household poverty. Yet, its modest marginal impact suggests that poverty
alleviation programmes need to refocus their attention on enhancing the efficiency and
diversification of microfinance activities.
The village bank group (N = 50) was associated with an average monthly Income (Mean =
K1144.03, SD 958.3117), by comparison non village bank group was (N = 50) with monthly
Income (Mean= K530.72, SD 616.23). To test the hypothesis that Village bank group and nonvillage
bank group have significant different mean income, an independent samples test was
performed. As can be seen in the table 3. Additionally, the assumption of homogeneity of
variance was tested via Levenes F test, F (98) =1.465, p = 0.230, p >0.05.
