Socio-Economic and Institutional Constraints to Accessing Credit among Smallholder Farmers in Nyandarua District, Keny
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Date
2010Author
Muiruri, E J
Nyangweso, P M
Kipsat, M J
Ndambiri, H K
Ritho, C
Ng'ang'a, S I
Kefa, C
Ogada, J O
Omboto, P I
Cherotwo, F H
Type
ArticleLanguage
enMetadata
Show full item recordAbstract
Amongst the challenges faced by smallholder farmers
in production is inaccessibility to credit. This s
tudy sought to
identify household socio-economic and institutional
constraints influencing access to credit among sma
llholder
farmers in Nyandarua District. The study used a Log
it model. Both quantitative and qualitative data we
re acquired
from primary and secondary sources. Primary data wa
s collected using questionnaires through a survey d
esign. A
sample of 164 smallholder farmers was selected usin
g stratified, multi-stage random sampling technique
s. Data was
analyzed using descriptive statistics and maximum l
ikelihood method using Statistical Package for Soci
al Sciences
(SPSS). The study established that socio-economic c
onstraints such as age, gender, household size, far
m income,
collateral and awareness are critical determinants
of access to credit. The study also established tha
t institutional
requirements such as costs involved in operating /
maintaining bank accounts, loan requirements and tr
ansaction costs
involved in the credit process influenced access to
credit. The study concludes that household socio-e
conomic
characteristics and institutional requirements infl
uence access to credit. Key recommendations made in
clude the need
by government to deal with bureaucracies involved i
n land registration to benefit majority of smallhol
der farmers who
remain insecure in the land they use without proof
of ownership and also to make easier the registrati
on of lease
certificates for those who do not own land and use
land on leasehold tenure system. Financial institut
ions should also
put in place less stringent credit requirements and
reduce credit costs especially interest rates to m
ake credit more
affordable.
URI
http://www.iiste.org/Journals/index.php/EJBM/article/view/3627/3676http://erepository.uonbi.ac.ke:8080/xmlui/handle/123456789/51289
Citation
European Journal of Business and Management; 4(21): 159-170Publisher
Department of Agricultural Economics, University of Nairobi, Kenya
Description
Journal article