Abstract:
This study assessed the factors affecting the access of rice growers in Bugarama marshland to
financial credits. The data used were collected from a sample of 100 Rice growers using focus
group discussion and structured questionnaire. The data collected permitted to estimate the log it
model. SPSS was used for the estimation. The model estimation results showed that the interest
rate, level of income, land size, age and costs of production including labour and fertilizers are
the significant factors while education and farming experience do not really affect the access of
farmers to financial credits. Furthermore, formal institutions remain the major source of credit
for larger credit seekers when they comply with prior conditions of mostly valued assets for
collateral, while informal sources of credit such as local money landers serve small and short
term credits to farmers who fail to comply with requirements of formal financial institutions.
From policy side, the inclusion approach to strengthen farmers associations and integrating
them in value chain can increase the chance of accessing credit products such as group credit
from formal sources. In addition, any financial credit provision that is targeting to supply credit
in rural communities would customize the payback period by considering crop calendar if
farmers income depends on harvesting time and selling their produce |
