Impact of Microfinance Individual Business Loans on Nutrition in Taraba State, Nigeria

This study examines the impact of individual business loans obtained from microfinance institutions on nutrition among loan beneficiaries in Taraba State, Nigeria. Nutrition is conceptualized not in the narrow sense of dietary intake, but as a nutritional capability which includes the capacity of individuals to achieve the health and wellbeing outcomes that matter to their everyday lives, following Sen’s capability approach. Primary data was collected using survey research design from 371 beneficiaries of microfinance institutions sampled from a population of 397 beneficiaries of the microfinance institutions in the three senatorial districts of Taraba State which was obtained through stratified random sampling. Five proxy measures of nutritional ability including appetite, mental health, body weight, sleep duration and blood pressure were measured along a three-point ordinal scale and the factors determining the composite nutritional ability outcome were estimated using a probit regression model. On balance, the results indicate that access to individual business loans is associated with a decrease in nutritional capability, with age, number of children, occupation and loan cycle all having significant and negative impact, and education having a significant positive impact. The negative effect is mainly due to the stress of the loan repayment burden, not to the loans themselves. The study suggests that the Central Bank of Nigeria should review the practices in the recovery of microfinance loans and design loan products that are more sensitive towards the wellbeing of borrowers.