Determinants of Agircultural Financing among Small Scale Farmers in Kanduyi Sub County Kenya

S.C. Sabuni¹

Section:Research Paper, Product Type: Journal-Paper
Vol.9 , Issue.4 , pp.1-13, Apr-2023

Online published on Apr 30, 2023

Copyright © S.C. Sabuni . This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
 

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Abstract :
Small scale farming is turning out to be a primary determinant of productiveness, economic growth and creativity. Therefore microfinance is being used to empower participants in small scale farming through boosting farming into an economic activity by cushioning farmers from acute challenges of poverty. Despite the researches done, there still exists a gap on agricultural credit financing among small scale farmers in Kanduyi Sub County with reference to interest rates charged, household economic factors, financial credit regulation and demand for collateral quality. The research investigation pursued to find out the determinants of agricultural financing among the small scale farmers in Kanduyi Sub-County, Bungoma. This was specifically addressed by seeking to analyze the degree by which interest rates charged, household economic factors, financial credit regulations and the extent by which demand for collateral security affects small scale farmers’ access to agricultural credit finance in Kanduyi Sub County. A descriptive research design based on survey methodology was used by the research investigation to address the research objectives. In the study, an extract of 392 respondents was randomly extracted from the study population of 18,580 small holder farmers. The researcher relied on primary data source that was captured using a structured set of questions. Descriptive and regression models were adopted for analysis of the collected data. The research findings noted that interest rates, household economic factors, financial credit regulations and demand for collateral security considerably increases agricultural credit financing for small scale farmers in Kanduyi Sub County. The research work recommended the need for development of affordable cost of credit models, increase in financial literacy programmes, improvement and provision of facilitative legal reforms on collateralization and the need to collateralize standing crops as key solutions to increase access to agricultural financing by small scale farmers.

Key-Words / Index Term :
Agricultural Credit Finance, Interest Rates, Household Economic Factors, Financial Credit Regulations

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