Research Journal of Finance and Accounting www.iiste.org ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online) Vol 2, No 5, 2011 24 | Page www.iiste.org Socioeconomic Characteristics of Beneficiaries of rural credit Muhammad Amjad Saleem Government College of Commerce & Management Sciences Dera Ismail Khan (Pakistan) Abstract Agriculture is not only the backbone of our food, livelihood and ecological security system, but is also the very soul of our sovereignty. In Pakistan population density is high and has been increasing day by day and agricultural land has been decreasing because of fragmenting or converting it into residential plots. To meet the domestic food requirements and raising standard of life use of improved production technologies developed by research is must. In this behalf government of Pakistan has been extending loan to poor farmers for adoption of new farm technology; a capital intensive technology. Right adoption of new farm technology depends on different demographic factors of farmers. Therefore objective of the paper was to see who benefits more of credit. Primary data regarding different determinants effecting well being of farmers after use of credit was collected from 320 farmers who participated in credit using stratified sampling technique through structured questionnaire. Descriptive statistics, ANOVA and Linear regression model was applied with the help of SPSS. Education and visiting agriculture information centre were found significant suggesting younger more educated farmers who visits information centre be provided credit ,as they had ability to improve their standard. Keywords: Rural credit; house hold economic welfare Introduction International prose asserts that rural credit began alleviating poverty quite a lot of decades ago when organization of different nations started testing the notions of lending to the people who were on the breadline .According to Vogt (1978), credit may provide people a chance to earn more money and improve their standard of living Agriculture sector in Pakistan is contributing nearly 22% to the national income of Pakistan (GDP) and employing just about 45% of its workforce. As much as 67.5% of country’s population living in the rural areas is directly or indirectly reliant on agriculture for its livelihood (Government of Pakistan, 2008).Agriculture as a segment depends more on credit than any other segments of the financial system because of the seasonal variations in the farmers’ returns and a varying tendencies from subsistence to commercial farming. Most small farmers cannot back their farming business from their inadequate savings. These farmers therefore require support in the form of assembly credit in order to take up relevant technologies to improve their farm productivity and income (Ater et al., 1991). Dera Ismail Khan division lies in the arid zone of Pakistan and is located in the extreme south of the Khyber Pakhton Khawa Province at the bank of river Indus. Total geographic area of 0.73 million hectares out of which only 0.24 million hectares is cultivated. About one third of the cultivated area is irrigated while the other two third depends on rainfall and hill torrents for its moisture requirements. Main stay of peoples of this area is agriculture and over 75% population derives its earning directly or indirectly from agriculture, till recently, farmers are a poor segment of population of this district. Their income is quite meager. Technical know how is limited. Where farmers of study area need practical guidance in the application of new farm technical know how there they need credit to apply this capital intensive technology. Therefore main objective of paper was to see socioeconomic characteristics of farmers who has ability to improve their standard as a result of using rural credit in their farms and hence a good impact on the economy of the area. Literature Getting access to credit helps the poor improve their productivity and management skills and hence, increase their income and other benefits such as health care and education. Pragmatic evidence can be originated from various papers, such as (Morduch, 1995; Gulli, 1998; Khandker, 1998; Pitt and Khandker, 1998; Zeller, 2000; Parker and Nagarajan, 2001; Khandker, 2001; Khandker and Faruque, 2001; Coleman ,2002; Pitt and Khandker, 2002; Khandker, 2003) Quach, Mullineux and Murinde (2003) found that household credit contributes positively and significantly to the economic wellbeing of households in terms of per capita expenditure, per capita food expenditure and per capita non-food expenditure. The positive effect of credit on household economic wellbeing was apart from whether the households were poor or better-off.