ABSTRACT

Agricultural credit is a practice of receiving loan with interest rates which is used to increase agricultural production. Agricultural credit now a day’s becomes a serious agenda in economic activities across the globe and it is one of the contributing factors for economic development; especially in the third world countries. It is a mechanism through which the interaction between supply and demand can be maintained in the society. This study is aimed to assess the role of Agricultural Credit in improving the livelihoods of Farming Households in Case of Oromia Credit and Saving Share Company by taking Gomma Woreda.  as a case which is found in Oromia region Jimma Zone. The investigator used descriptive type of research design and mixed method is employed as the research approach. The data were collected from both primary and secondary sources. The primary  data  for  this  study  was  collected  from  177  respondents  which  were  selected  by  applying  random 

 x  sampling  techniques  using survey questionnaires and  in  depth  interview was  conducted  with  6  individuals identifying them through purposing sampling technique. In addition 12 participants were taken part in FGD. The study applied both qualitative and quantitative methods of data analysis to interpret the result of the study. The study’s finding shows that; Agricultural credit is widely received by many people in study area. Farmers are highly engaged in receiving agricultural credit to improve their livelihoods. Furthermore the study shows lack of access to this credit and inability to fulfill requirements of MFI are major problems. In addition this study indicated that some individuals use the credit for other purposes than for agricultural production. This agricultural  credit  has  positive  impact  on  social  and  economic  life  of  the  community  and  result  in accumulation  of  assets.  Based  on  the  findings  of  the  study,  the  role  of  agricultural  credit  in  improving livelihoods of farming households is identified. As recommendation different government institution, NGO and MFI should focus on creating the awareness of the society on the use of agricultural credit. In general this study shows that the role of agricultural credit significantly affects the livelihoods of farming households.   Key Words: – Agricultural credit, Livelihoods, Microfinance, Poverty.

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