Factors Determining Access To Credit Facilities For Farmers In Cherangany Constituency In Trans- Nzoia County

Abstract

It has been postulated that access to credit for farmers has been influenced by a number of factors. It is presumed that there exists a relationship between agriculture productivity and poverty alleviation (Nyoro, 2002), and hence the critical need to address inadequate credit facilities in rural areas that are a key constraint to farmers investments. Given that the major economic function of financial institutions include addressing the restraints imposed by inadequate access to financial services; it is argued that these institutions are well positioned to dealing with these financial constrains among which include access to credit. Literature review in chapter two revealed that access to credit was a challenge facing farmers in various parts of the globe. Studies indicated that a significant proportion of challenges in the farming industry could be alleviated through the provision of sustainable and easily accessible credit. For this study, data was gathered using questionnaires and was analyzed using Ms-Excel and presented using elementary statistical techniques such frequency tables and charts. After analyzing the findings, the researcher drew conclusions and made recommendations. Areas for further studies were identified as well. Research established that collateral, basic loan requirements and interest rates on loans are key determinants to farmer’s access to credit, deficiency in any of the above factors hindered farmers from getting credit. After assessing the findings of the study, the researcher made recommendations aimed at improving and making it easy for farmers to access credit, e.g. coming up with loan products specifically tailored for farmers and opening of rural branches by financial institutions to bring services closer to farmers.