Socioeconomic Impacts of Micro Credit on Farming Communities of Laghman Province, Afghanistan

Agriculture sector plays an important role in Afghanistan’s economy. The development of agriculture sector required adequate finance. Microfinance can provide financial support in suitable term and condition. Microfinance impacts on the socioeconomic status of the farming communities. So, this research was conducted to study the impacts of the microfinance in the study area. The data was collected from 120 farmers, 60 users’ and 60 non users’ of micro credit through personal interview. The results of the study were showed that the farming communities were used micro credit for the agriculture purpose, and were obtained micro credit from various formal and non-formal institutions. It was also observed that micro credit has had positive impacts on the income, education, recruitment, expenditure, self-confidence and decision-making ability of borrows’ in the study area. It was also found that the formal sources could not provide sufficient loan amount, with suitable terms and conditions. It is suggested to policy makers to provide adequate loan based on Islamic rules for the farming communities.