Social Economic Factors Influencing Uptake Of Bank Loans Among Small Scale Maize Farmers In Kiminini Constituency, Trans-nzoia County, Kenya

Abstract

Despite the varied sources of finance available from banks and other financial institutions, small scale maize farmers have challenges of not accessing these sources. The purpose of the study was to investigate the social economic factors of small scale maize farmers in relation to accessing bank loans in Kiminini Constituency, Trans-Nzoia Country, Kenya. The investigation was guided by the accompanying goals; to determine how land ownership influence uptake of bank loans among small scale maize farmers; farmers’ characteristics influence on uptake of loans; family governance structure influence on uptake of bank loans; to determine how employment influences farmers’ uptake of bank loans; cultural factors influence on uptake of bank loans among small scale maize farmers. Purposive and Stratified sampling techniques was used to select a sample size guided by Yamen’s formula to arrive at 348 farmers. The information was gathered utilizing surveys. A pilot study was utilized to decide the legitimacy and unwavering quality of the surveys. The information was examined utilizing descriptive measurements. The significance of this study included obtaining information that would help establish why there is low uptake of bank loans by small scale maize farmers. The information may help establish the critical role of funding of farming activities and hence ensuring small scale maize farmers are adequately funded. Small scale maize farmers’ funding is an important area of study in line with the Government agenda of food security which was boosted among others through funding sources including bank loans. The examination discoveries uncovered that family governance structure was the most influential characteristic on uptake of bank loans by (Mean=4.30, Std Dev=0.492) since a total of 194 respondents indicated on the chi-square findings. There was statistical significant influence between family governance structure and uptake of bank loans among small scale maize farmers in Kiminini Constituency. Family governance is challenged by the status of job security of both parents. When family members or an individual is employed or and has impact over family property then banks can easily accept to offer loan. There was a statistical significant influence between family governance structure and uptake of bank loans among small scale maize farmers in Kiminini Constituency. The status of each parent (father and mother) has got influence on loan uptake because parents who have job as the security to guarantee loan repayment have a better status to enable access of loan. Further, political affiliation of individuals has significant influence on loan uptake. The study recommends to the county assembly of Trans Nzoia County to allocate more funds to the local people especially men aged 50 years who are farming and funding that will be given as the incentives to motivate them.