MBA Thesis

The impact of Micro finance to the income and livelihood of farmers. Case study in Battambang Province, Cambodia

By

Rath Bunhorng

In partial fulfillment of the requirement for graduation

From University of Battambang in Master of Business Administration

October, 2014

ACKNOWLEDGEMENT

I must gratefully acknowledge to my family, professors, and friends who help me in writing dissertation for graduating master of business administration at University of Battambang.

First, and foremost, I am thankful for my father Rath Bun bunhoeun, and my mother Som Sam Un have four divine state of minds such as loving kindness or charity, compassion, sympathy, and equanimity for me. Moreover, my parents and sibling for being unfailingly support, kindly help, and providing a loving environment for me. No word is enough to express my gratitude to them.

Thank you rector of University of Battambang, H.E. Sieng EmTotim, set the rules that MBA students must do the dissertation only in order to graduate and encourages students for conducting research on social and technological issues for having its aim the advancement of mankind’s knowledge especially for local authorities, government and non-governmental organization in order to prepare development plans and strategies.

Great thank for Professor, Hoover Agyao-PhD, dissertation advisor, who likes a lighthouse, patiently shined a light illuminating the path ahead. I have come a long way and learned a lot through this odyssey. I am infinitely grateful to Professor, Terry Trethowan, co-advisor, generously helps me to edit my research proposal and dissertation many times. Needless to say, this dissertation would not have been written successfully without the support from him.

Thank H. E. Touch Visalsok, PhD who has taught me scientific writing and communication. Thank lecturer Leng Bunhor who has taught me advance statistics.  Thank you lecturer Tieng Morin who has taught me advances research methodology. Thank lecturer Seav Sovanna has tried very hard for facilitating in dissertation.

I would like to thank for credit officers (14 people) at Cambodia Post Bank, PLC in Battambang Branch and my friends helped me to interview households.  

            Thanks other people who help and inspire me to reach higher when I got discouraged and celebrating with me when success finally arrived!     

ABSTRACT

The study has been conducted in three districts of Battambang Province, namely, Battambang District, Sangkae District, and Banan District. The main objective of the study is to access the impact of microfinance to the livelihood and income of farmers. The study focuses on five specific objectives such as the demand for informal and formal microfinance in agriculture, the perceptions of the borrowers on microfinance, the problems and overcoming obstacle in paying their loans, investing costs and revenue of agriculture, and the impact of microfinance to the livelihood and income of farmers. 

The study has used non-probability sampling (purposive method) to choose simple size. A sample size of 70 households was chosen to interview. The simple random sampling method was used to choose population simples. Moreover, the study used questionnaire in order to get the primary data by interviewing 70 households. And the study used books, thesis/dissertation, research journals, annual reviews, newsletters, and conference proceedings were obtained from Internet and library in order to get secondary data. The study relies on quantitative and qualitative data

The results of survey show that microfinance has positively impact on livelihood and income of households engaged in farming activities. Most of their income increased because they were able to buy fertilizers, seeds and other important inputs with the micro finance, which resulted in higher yields and better quality outputs. Moreover, borrows agree that microfinance helped double their income or earn more than before, instilled in them the value of saving, strengthen their livelihood, instrumental in improving the lives of the rural poor, good agricultural occupations, become more responsible in handling their finances, promotes production and development in agriculture, and help capital for buying agricultural supplies, equipment, and land. In addition, famers agree that microfinance helped initiate the planning, organizing, decision making and problem solving skills of the rural poor. The study concludes that there was positive contribution of loan given by the micro finance institution on the development loan members with respect to cash flow, asset position, livelihood, and income in households. The result of this survey can provide useful data for governments, non-government organizations, banks, and microfinance institution in order to prepare development plans and strategies. People can use data to know the problems, the advantages of borrowing, and utilization of the borrowed money effectively. Students can use information to get the concepts of research.