Influence Of Credit Accessibility On The Performance Of Banana Farming: A Case Of Kanyakine Ward, South Imenti Sub-county

Abstract

The agricultural sector is the leading contributor to Kenya’s economy. Besides the major cash crops cultivated in Kenya, Banana farming has too dominated the sector contributing greatly to the total GDP. However, banana farming has not been able to reach its full potential due to several factors among them being poor or lack of credit accessibility by those cultivating it. The researcher carried out a research to determine the influence of credit accessibility on the performance of banana farming in Kanyakine ward, Meru county, Kenya. The purpose of this study was to determine the influence of credit accessibility on the performance of banana farming. The study was guided by three objectives; to determine the influence of collaterals on the performance of banana farming; to determine the influence of cost of credit on the performance of banana farming and to determine the influence of availability of credit services on the performance of banana farming. This study was conducted at Kanyakine ward of South Imenti Sub- county in Meru County and was guided by the Financial Intermediary Theory and the financial inclusion theory. The study adopted a descriptive survey design using quantitative approaches. This study targeted 114 small scale banana farmers located in Kanyakine and it used Nassiuma’s formula to calculate the sample size which was 54. stratified random sampling method was adopted to ensure equitable representation among 3 villages in Kanyakine ward. These are Kaira village, Kiungani village and Kirimani village. For data collection, the study used a structured questionnaire, which was first pilot-tested to assess both its validity and reliability. To facilitate data processing and analysis, version 23 software of the Statistical Package for Social Sciences (SPSS) was used. In the analysis, descriptive and inferential statistics were used and the results were presented in frequency tables from where adequate, realistic, reliable and relevant conclusions and recommendations were deduced. This study revealed that collateral requirements and cost of credit negatively influenced performance of banana farming. These variables mostly discouraged farmers from seeking credit facilities which would have in turn improved their farms’ performance. It was however noted that availability of credit services had a positive relationship to the performance of banana farming. The more readily available credit facilities were, giving the farmers adequate amount of credit, at the right time and with adequate payment periods, the more farmers sought credit. The study recommended that financial service providers and financial policy makers should tailor make policies that favor the small scale producer so as to lighten their burden when it comes to access of credit. The study also recommended that farmer should seek out more information regarding credit and credit providers so as to avoid issues that might arise with failure to pay or lateness