International Journal of Agricultural Economics and Extension Vol. 1 (5), pp. 024-030, June, 2013. © International Scholars Journals

Full Length Research Paper

Modelling the role of pro poor agro based micro, small and medium enterprises on poverty reduction in Malawi

PhiriInnocent Pangapanga¹, George Kussein², Shelton Kanyanda³ and Charles Machinjili⁴

This paper quantifies the impacts of pro poor micro, small and medium scale enterprise on households’ poverty reduction in Malawi. The paper employs normalized censoring modelling on 1000 household dataset from across Malawi. The paper found that pro poor agro based micro, small and medium scale enterprises sure as  fish and mushroom farming, cassava flour processing, pig and chicken rearing, rural bakeries, and others have positive effect on household poverty levels. Pro poor agro based enterprises generally reduced household poverty by 8-24% in Malawi at 5% level of significance. However, the data depicts that pro poor small and medium scale businesses owners are challenged by lack of credit, low bargaining power, high input costs, low product prices and lack of reliable markets. The paper strongly recommends that pro poor programs ought to be gender responsive and strongly mainstream micro, small and medium enterprises in poverty reduction programs at all levels of their operations.

Key words: Households, censoring modelling, pro poor agro enterprises, Malawi.