Abstract
Agricultural credit has been argued to be very important for sustainable agricultural development and poverty reduction in rural areas. This study seeks to identify and to analyze the determinants of smallholder farmers’ access to and use of credit in Suakoko district, Bong County, Liberia. This research is quantitative using a survey questionnaire distributed to 105 smallholder farmers. Data was analyzed using descriptive statistics and causal analysis was performed using a binary Logit regression model. Results from regression indicate that 39% of the farmers were credit users. The marginal effects of bank account and other sources of income show significant and positive effects on access to credit. However, education, occupation and group membership are significant but have negative effects on access to credit by smallholder farmers. The results also show that 38% of credit users applied credit received for agricultural activities, while the rest utilized it for non-agricultural activities. It is recommended that a policy should be established to ensure older farmers gets adult literacy while younger farmers get formal education. Moreover, the government should issue a policy aimed at increasing opportunities for off-farm activities through creation of jobs and motivating self-employment. Finally, the government should promote the creation of development groups geared towards providing collateral support for members and also serve as guarantors for farmers to receive banks credit/loans in order to increase agricultural productivity in the study area. Key words: Credit access, rural, farmers, smallholder, Suakoko district, Liberia.
Highlights
Agriculture is critical for global economic growth and it accounted for one third of the world’s gross domestic product (GDP) in 2014
Microfinance institutions such as Liberian Entrepreneurial and Asset Development (LEAD), United States Agency for International Development- Food and Enterprise Development program (USAID-FED), Bangladesh Rural Advancement Committee (BRAC), and Progressive Farmers Organization (PFO), have been providing credit, extension services, business training, and input in order to improve the situation of access to credit by smallholder farmers and low income earners in Liberia (McNamara et al, 2011)
Developing new demand-driven services that will address the needs of the poor communities is a required initiative that should be considered by policy makers
Summary
Agriculture is critical for global economic growth and it accounted for one third of the world’s gross domestic product (GDP) in 2014. Agricultural development is projected to feed 9.7 billion people by 2050 It is considered the most powerful poverty reduction tool (World Bank, 2017). There is increase investment by private sectors in agriculture evident by famers who have options in seeds planted, fertilizers used and produce markets (AGRA, 2016). Factors such as war, lack of agricultural financing, climate change, floods, and global warming still pose major threats to Africa’s agricultural productivity (World Bank, 2017). Agriculture in Liberia has contributed 42% of the national Gross Domestic Product (GDP) in 2016 (CBL, 2016). This study sought to identify and to analyze the determinants of smallholder farmers’ access to and use of credit in Suakoko district, Bong County, Liberia
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