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Map of Manicaland Province showing Makoni District
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This study used data from 77 smallholder tobacco farmers from Makoni district in Zimbabwe to investigate factors affecting smallholder tobacco farmers’ access to formal credit. The results of the study showed that contact with extension services, farmer’s attitude towards risk of borrowing and ownership of land cultivated significantly and positive...
Citations
... Studies from rural Uganda and Kenya also show that rural households' savings determine their credit access for agricultural activities (Kansiime et al., 2021). It sides with Beyene & Muche (2010) and Dube et al. (2015) in Ethiopia and Zimbabwe, where livestock ownership guarantees credit access since they are fungible assets and serve as rural savings. Similar findings in Nepal and India indicate that income status and gender influence a household's likelihood of accessing agricultural credit (Adhikari and Shrestha, 2013;Imai et al., 2010). ...
... Similar empirical evidence exists in Nigeria, where smallholder livestock farmers frequently receive more credit than their counterparts who have no livestock (Akpan et al., 2013). However, studies in Central Ethiopia and the Mankoni District of Zimbabwe show that fungible asset such as livestock ownership is not a significant credit access determinant (Beyene and Muche, 2010;Dube et al., 2015) Regarding savings and credit access during the COVID-19 pandemic, the results revealed savings as a significant determinant of credit access. Given the collapse of the local economy induced by COVID-19 and its stringent containment measures, it is more likely that most households exhausted their subsistent savings. ...
... It is found in the natural farming region 2 which is mainly characterized by intensive crop and livestock farming systems, receiving an average rainfall of 700 to 1050mm per year and is subject to either more severe dry spells or the occurrence of a relatively short rainy season (Murashiki et al., 2017;Dube and Mugwagwa;. According to Dube et al. (2015), Makoni district is primarily a farming district with the chief crop being tobacco and a large number of smallholder farmers in the area are involved in groundnut. ...
Groundnut production and marketing contribute substantially to food and nutrition, livestock feed, soil fertility amendment, and income diversification for the majority of poor smallholder farmers in rural Zimbabwe. However, one of the challenging issues affecting the benefits from groundnut farming continues to be the low market involvement of smallholder farmers. Research on the factors preventing smallholder farmers from effectively participating in local markets remains inadequate and inconclusive. Hence, this study examined the market participation of smallholder groundnut farmers in Zimbabwe and assessed the key factors influencing their decision to participate. A survey was conducted among 234 randomly selected smallholder groundnut farmers in the Headlands area of Makoni district, Zimbabwe. This study employed a combination of data analysis methods, comprising descriptive statistics and econometric tests. The results suggest that groundnut market participation is fairly low in Makoni District. Logit model results indicated that the decision to participate in the local groundnut market was positively influenced by membership in a farmer organization, quantity harvested, off-farm income, and access to credit. Additionally, household characteristics such as family size, gender (being female), and marital status (being divorced) had a negative relationship with the farmers' market participation decision. These findings provide insight into why smallholder groundnut farmers in Zimbabwe select themselves out of remunerative markets. To increase smallholder groundnut farmers' market participation, the government and concerned stakeholders need to focus on strengthening extension services and farmer organizations, which are key to improving smallholders' access to production information and credit facilities.
... Empirical studies have demonstrated that collateral increases access to capital from financial institutions. Particular assets act as a means to mitigate the risks of asymmetric information and moral hazard when making asset-based lending (Nouman et al., 2013;Dube et al., 2015). Therefore, the positive relationship between collateral and the household's ability to access loans is essential when the bank considers a household's loan decision. ...
Purpose: The study studies the factors affecting access to credit of individual business households in Ho Chi Minh City (HCMC), Vietnam. The authors proposed policy implications based on research results that improve access to credit for individual business households. Theoretical framework: Access to formal credit can be understood in many ways. This article considers that access to proper credit is the ability of a customer to use the capital of a traditional credit institution based on meeting financial obligations - emphasizing the ability to repay both principal and interest. Design/methodology/approach: The authors chose a mixed method to conduct the study. This is a suitable research method to answer the research questions raised. Mixed methods include both qualitative and quantitative methods. However, this combination is the implementation of interlacing, replacing the two approaches to solve each problem, the research design's specific goal. The authors analyzed Data from May 2022 to December 2022 in HCMC based on the EFA and CFA, using the structural equation model analysis (SEM) method with SPSS 20.0 software and Amos. Findings: The article's findings showed five factors affecting access to credit of individual business households in HCMC, Vietnam. In particular, the loan procedure factor substantially impacts the five factors affecting credit access. Research, Practical & Social implications: The study has provided empirical evidence on the factors affecting formal credit access by a linear structural model and provides evidence that factors such as the loan procedure affect traditional credit affecting access to credit. Originality/value: The authors give some policy implications for state management agencies, credit institutions, customers, and mass organizations, such as increasing the role of local Government and increasing the ability to use banks, E-commerce, design new loan products to help individual business households access more formal capital, and at the same time, reduce black credit.
... Plus l'information est claire et complète, plus la probabilité de demande de microcrédit augmente. Cette conclusion est en accord avec l'étude menée par Kodjo et al. (2003) et Dube et al. (2015), qui ont souligné l'importance de fournir des informations sur les potentialités et avantages de demande d'un microcrédit. En revanche, va à l'encontre des résultats de l'étude menée par Yehuala (2008). ...
Cet article examine les déterminants de la demande de microcrédit par les petits exploitants agricoles familiaux dans la province Chtouka-Ait-Baha au Maroc. L’étude a été menée auprès de 296 exploitants agricoles en utilisant une méthode de sondage stratifiée. Les données ont été analysées à l’aide d’un modèle Logit.
Les résultats montrent que les caractéristiques socioéconomiques telles que le revenu, la confrontation de l’intérêt à l’usure et la proximité de l’Association de microcrédit (AMC) ont une relation négative et significative avec la probabilité de demande de microcrédit. Cependant, l’information sur le crédit et l’exercice d’une activité non agricole ont une relation positive et significative avec la probabilité de demande de microcrédit. En ce qui concerne les caractéristiques intrinsèques des petites exploitations agricoles familiales, l’étude montre une relation négative entre le nombre de bovins et la superficie disponible avec la probabilité de demande de microcrédit, et une relation positive entre la superficie cultivée et la demande de microcrédit.
L’article recommande la mise en place de produits financiers plus adaptés aux besoins des petites exploitations familiales et une meilleure structuration du secteur agricole pour améliorer l’accès aux financements et encourager la diversification des activités. Ces recommandations peuvent renforcer le rôle des associations de microcrédit dans le financement des petites exploitations agricoles familiales au Maroc et contribuer ainsi au développement économique et social des zones rurales.
... Lack of acceptable collateral security has been seen as the greatest impediment for smallholder farmers to access financing from formal financial institutions, such as banks. LIGHTON et al. (2015) state that the vicious cycle of low investment in agriculture has been perpetuated by a lack of land tenure. Resultantly, smallholder farmers cultivate small pieces of farmland, harvest low yields, and remain poor. ...
... They go on to state that the provision of formal credit to rural populations is a very effective strategy for poverty reduction. However, the greatest impediment for farmers to access formal financial services is the lending policies, such as complicated application procedures and credit restrictions, of most banks (LIGHTON et al. 2015). In the Zimbabwean context, lack of collateral, high-interest rates, liquidity problem and lack of insurance which can be used as a guarantee, has been cited as the major challenges facing Zimbabwean smallholder farmers in accessing formal credit (ZIMBABWE FARMERS UNION 2011). ...
Post the fast-track land reform programme, the Government of Zimbabwe came up with theA1 settlement permit to assure resettled farmers of security of tenure on the land. The resettled farmers need finance to be productive on the farms they occupy. This study was carried out to evaluate the effect of the A1 settlement permit on the ability of smallholder farmers to access finance from formal financial institutions using a qualitative phenomenological design. Fifteen interviews were conducted to collect data from the resettled farmers. The research found that most of the smallholder farmers did not have access to finance from formal financial institutions as they were excluded from formal financial markets. It was also found that most formal financial institutions shunned A1 settlement permits as security of tenure documents, as they believed that the permits were not bankable. The study also found that some scrupulous and unscrupulous financial services providers provide finance to smallholder farmers. The study recommended that access to finance is paramount if the smallholder farmers are to fully utilise their allocated pieces of land. Further, robust financial education and literacy must been encouraged so that there is increased access to finance by smallholder farmers.
Keywords: agricultural finance; collateral; collateral substitute
... However, Mhlanga et al. (2020) posit that access to borrowing and taking out insurance, among others, may be critical to eradicating extreme poverty, a district study show that challenges remain in eradicating extreme poverty despite organizational intervention and availability of saving and lending schemes (Kabonga et al., 2021). These indicative that the country may be lagging behind in achieving SDG 1 partly because most smallholder farmers do not have access to lending schemes, citing inadequate collateral, exorbitant interest rates and liquidity problem as major bottlenecks (e.g., Dube et al., 2015;Mutambara, 2016). In terms of SDG 2, the report showed that the country stagnated in its quest toward achieving its target (Sachs et al., 2021). ...
The adverse effects of climate change on food production coupled with growing inconsistencies in Indigenous knowledge systems have necessitated some farmers' willingness to rely on seasonal climate forecasts (SCFs) to make informed farming decisions. SCFs provide information regarding the likelihood that the rainfall in the forthcoming season will be higher, lower or normal. While SCFs have scaled up food production among some rural households in Sub-Saharan Africa (SSA), some farmers find it difficult to plug into this vital technology. Failure to utilize SCFs could have severe consequences for household food and nutrition security, especially in semi-arid countries like South Africa and Zimbabwe. By systematically unpacking the literature in South Africa and Zimbabwe from 2011 to 2021, this article seeks to demystify the factors that hamper the use of SCFs in the aforementioned countries. Results indicate that failure to comprehensively understand and interpret probabilistic forecasts as well as ill-timing of forecast dissemination, among others, are factors that undermine the use of SCFs. These issues are discussed both within the broader theoretical debates revolving around ways to dismantle the barriers undermining the use of SCFs in SSA, which could hamper the attainment of both the first and second sustainable development goals.
... There is a considerable number of research related to access to financial credit for small-scale farmers. They mostly link socio-economic and institutional factors that determine smallholder farmers' credit access from one region to another (Chandio, Jiang, Rehman, Twumasi et al., 2021;Dube et al., 2015;Kiplimo et al., 2015;Muayila & Tollens, 2012). Other scholars focused on agriculture credit access analysis and agriculture productivity (Ahmad, 2011;Chandio, Jiang, Rehman, Akram et al., 2021;Chandio et al., 2018), or the adoption of improved agriculture (Anang et al., 2015). ...
This article assesses the opinions of youth tomato growers on the accessibility of agricultural credit and factors that influence the accessibility in the Democratic Republic of the Congo (DRC). Data originated from a household survey for the 2019/2020 farming season. We interviewed 218 youth tomato growers from 6 horticulture production zones in the South-Kivu, eastern DRC. The result reveals a low rate of 20.6% on accessing agricultural credit among tomato growers. The topmost nature of agricultural credit received was cash-based, mostly from informal sources of finance (92.7%). The findings reveal that the lack of information on agricultural credit, the fear of credit default, and the absence of Microfinance Institutions in the study areas were the highest-ranking factors hindering tomato growers from accessing agricultural credit services. Our probit model shows that total household income, gender, and tomato growers’ membership in a cooperative were essential factors that explain the probability of accessing agricultural credit. We recommend formalising the agricultural credit system by improving agri-finance extension service delivery to associations of tomato growers among the young to access and use agricultural microcredit services effectively to enhance agricultural production, which is a proxy for rural employment creation and poverty reduction.
... Rural credit has proved to be instrumental in alleviating poverty and developing rural areas if it is given equally among female and male small-scale farmers. Several studies have been conducted in economically developing nations on factors affecting credit access amongst small-scale farmers (Baiyegunhi and Fraser, 2014;Dube et al., 2015). However, most of these studies are not gender-sensitive. ...
This study is a gender analysis of access to formal credit by both male and female small-scale farmers in Greater Letaba Municipality. The study precisely identified and described the socioeconomic characteristics of female and male small-scale farmers, analysed and compared factors influencing access to formal credit by these farmers, and determined the perceptions of female small-scale farmers towards the credit system. In collecting the primary data, structured questionnaires were administered to 140 respondents (70 females and 70 males) using the stratified random technique. The study employed descriptive statistics, principal component analysis and a probit model to analyse the data collected. The probit regression model discovered that farm size, land ownership, gender, age, collateral and extension services had a significant positive influence on small-scale farmers` formal credit access. Based on the study findings, a set of recommendations for achieving equitable formal credit access by female and male small-scale farmers was put forward.
... In the Ethiopian context, most of the existing researches/studies have only descriptively examined the role of formal credit access in agricultural production in rural areas. The studies considered the demographic, socioeconomic and Institutional factors for their analysis (Dube et al., 2015;Mebrate, 2015;Abafita et al., 2016;Assifaw & Adeba, 2016;Samuel, 2020). After critical reviewing empirical literature studies, the present study identified the following gaps. ...
... This might be due to the fact that the agricultural extension workers never recommend smallholder farmers in the study area to use formal credit with their current status because the farmers use their credit for home consumption purposes and the creditors need big collateral for their credit in addition to group landings. As a result, the study finding is different from the findings of Dzadze et al., 2012;Anang et al., 2015;Dube et al., 2015: Masaood & Keshav, 2020Samuel, 2020. ...
... This can be due to the fact that most of the credit users utilize the credit taken on household consumption and start nonfarm tasks for getting off-farm income to cover their credit. This finding is similar to the works of Muhongayirea et al. 2013Dube et al., 2015Kiplimo et al., 2015;Gbigbi, 2017;Masaood & Keshav, 2020. The coefficient of interest rate is negative; this indicates that credits with a high interest rate have less probability to access formal financial credit than credit with a low interest rate. ...
This study examines the factors affecting farmers’ access to formal credit in Basona Worana District, North Showa Zone, Amhara Regional State, Ethiopia. The study used cross-sectional data while conducting a survey. It was conducted from November 2019 to June 2020 G.C. A multistage random sampling technique was used, and 299 smallholders’ farmers were selected and fully took part in the survey. Quantitative data were collected using a structured questionnaire to identify the main factors of formal financial credit access. Of the total 299 participants, only 72 (24.1%) took formal financial credit from lending institutions. The data were analyzed by descriptive statistics and logistic regression analysis. The regression result reveals that age, sex of household head, family size, extension contacts, off-farm income, interest rate, lending procedure, group lending and Rapid Repayment Period are the main determinant factors that affect formal financial credit access at the household level, and these variables are found to be statistically significant at 1 % and 5 % levels of precision. On the other hand, the other remaining variables like education status, attitude towards credit risk, experience on credit use, farm land size, livestock ownership and distance from lending institutions are found to be statistically insignificant. Thus, policy makers should work to improve credit service supply and amount of credit and assist smallholders to invest the credit on their farming. Lending institutions should revise their group lending system, interest rate, lending procedure and rigid repayment periods.
... This is because extension agents are important source of information for many rural farmers and agents to link farmers' groups to credit sources. Likewise, Moahid and Maharjan (2020) and Dube et al. (2015) reached the same conclusion. ...
... Hence, farm size should positively affect participation and the amount of credit. Dube et al. (2015) also found that landholding positively and significantly influences access to formal credit by smallholder farmers. Asante-Addo et al. (2016) found that farm size has a significant and positive influence on the probability of a household participating in credit programs justifying larger farm size increases the demand for factors of production, such as labor, capital, seeds, fertilizer, and equipment. ...
Microcredit has been found to be a critical instrument in improving the livelihood of poor people who have no financial access from other formal financial institutions. This study examined the impact of formal microcredit on income of borrowers in the rural areas of Sidama Region, Ethiopia. Data was collected from 456 sampled rural households consisting of 200 borrowers and 256 non-borrowers. This study applied propensity score matching (PSM) model to analyze the impact of microcredit on income of the borrowers. The result of this analysis indicates that microcredit had a positive and significant impact on the income of the borrowers. The sensitivity analysis result showed that the impact result estimated by this study is insensitive to unobserved selection bias and it is a true impact of formal microcredit. Therefore, microfinance institutions, other governmental, and nongovernmental organizations working in credit provision should expand access to credit to rural households in poverty reduction strategies.
