| dc.description.abstract | Less than a fifth of Kenya's total land is productive agriculturally.
Shortages of additional productive agricultural land implies that, productivity and
employment on small scale farms which are the bulk of Kenya's arable land can be
increased through land use intensification. Land use intensification involves use
of improved inputs such as fertilizer and seeds besides improved tillage and
husbandry practises. These inputs are not available on the farm and some farmers
are not able to purchase them due to their meager income. Provision of agricultural
credit is one of the major strategies being used to speed up agricultural development
in Kenya's small scale farms sector. One of the setbacks of smallholder credit
repayments has been poor loan repayment,
The major concern of this study was to find the relative importance of the
factors affecting loan repayment performance by smallholder farmers with a major aim
of proposing measures that can help in improving the smallholder credit repayment
performance. Primary cross-section data collected from a rural area in Kenya was
analyzed by ordinary least square (OLS) regression methods.
The main findings of the study are that loan diversion, use of purchased
farm inputs, farm income (ratio of farm income to loan advanced to farmers), sources
of income from farming activities and farmers attitude towards loan repayment have
statistically significant influence on loan repayment. The study further found that
late Joan issue and inadequate supervision and technical advice on improved farming
methods have statistically significant influence on loan diversion.
Loan repayment performance by smallholder farmers can be improved through
use of agricultural credit on the intended purpose, attaining a high ratio of farm
income to loans advanced to farmers, increased use of purchased farm inputs,
concentration by farmers .on a few farming activities which contribute highly towards
income. changing the altitude of farmer towards loan repayment so that they have
the feeling and opinion that loan should be repaid and by providing a ready market
for farm produce. In addition to the above stated measure, timely use of loan funds and adequate technical advice and loan supervision can help reduce the
proportion of loan funds diverted to other uses. | en |
