Determinants Of Access To Credit Research Articles

Determinants of Credit Access and Amount of Credit by Youth in Rachuonyo North Sub-County

Determinants of Credit Access and Amount of Credit by Youth in Rachuonyo North Sub-County

Determinants of Credit Access By Small Scale Cassava Farmers in Awka North Local Government Area of Anambra State, Nigeria

The study examined the determinant of access to credit by small scale cassava farmers in Awka North Local Government Area of Anambra State, Nigeria. Specifically, the study identified the major sources of credit among the small-scale cassava farmers; estimated the determinants of farmers’ access to formal credit; compared the income of the farmers who have access to formal credit and those who had not; and identified constraints to farmer’s access to credit. A simple random sampling method was used in the selection of 240 respondents (120 who had access to credit and 120 who did not). The data for the study was from primary source through the use of structured questionnaire designed in line with the objectives of the study. Descriptive statistics, binary logistics regression model, t-test and mean score from a three-point Likert type of scale were used to achieve the stated objectives. The result on determinants influencing credit access among cassava farmers indicated coefficients of membership of cooperative society (4.971) to significantly determine the probability of small scale cassava farmer’s access to credit at 1% while the coefficients of experience (2.134), farm size (2.772), extension contact (2.669) and distance to credit source (2.333) significantly determine the probability of small scale cassava farmer’s access to credit at 5%. The Independent t test result indicates that farmers who had access to credit had better farm income (374, 627.90) compared to their counter parts in who had no access to credit (250, 129.87) which implied a significant difference (P<0.05). The major constraints of cassava farmers in credit access from formal and informal credit institution is inadequate collateral security (2.9) and high interest rate (2.6) respectively. The study recommended among others that Financial institutions such as Agricultural and microfinance banks, should be established in the rural areas and the procedures for securing loans should also be streamlined in order to make it simple for the farmers.

Determinants of credit access among rice farmers in rural Cameroon

Inadequate access to credit remains a major constraint to agricultural production in Africa. However, not all farmers face this difficulty. This article assesses the determinants of agricultural credit access among rice farmers who are members of the Ngoketunjia Cooperative Credit Union in the Northwest Region of Cameroon. A structured pretested questionnaire was administered to 126 randomly selected credit beneficiaries and non-beneficiaries, all of whom are members of the study credit union. Binary logistic regression was performed, with the dependent variable (access to microcredit) being 1 (yes) if the respondent received a loan during the 2018/2019 farming season, and 0 (no) otherwise. 12 explanatory variables were used in the analysis, which adopted a 10% level of significance. Statistically significant relationships were observed between farm size, inputs, farm output, and access to loans, suggesting that access to microcredit has a positive impact on agricultural production. The three key factors facilitating access to microcredit were farming experience (B = 0.38, p = 0.06), the educational level of the farmer (B = 0.81, p = 0.06), and the diversion of loans to solve other problems (B = 1.64, p = 0.06). Based on these results, we recommend better financial inclusion of rice farmers in microcredit schemes to increase local rice production and reduce imports in Cameroon.

Determinants of institutional agricultural credit access and its linkage with farmer satisfaction in India: a moderated-mediation analysis

PurposeThe study assesses the relationship between institutional credit access and farmer satisfaction using contextual mediating and moderating variables. This study identifies various socioeconomic, service features and service quality determinants impacting institutional credit access.Design/methodology/approachThe authors used the stratified random sampling method and selected 512 farmers from 40 villages in Maharashtra, India. Initially, the study employed probit regression analysis to identify the credit adoption determinants. Subsequently, the relationship between institutional credit and farmer satisfaction is identified through moderated-mediation analysis using the Statistical Package for the Social Sciences and Analysis of a Moment Structures (SPSS - AMOS model).FindingsProbit model's results suggest that socioeconomic variables like education and bank distance; service quality variables like prompt service and employee behavior; and service characteristics variables like the interest rate, loan sanction time, repayment period, and documents for loan application significantly affect institutional credit adoption across the smallholders. Subsequently, the results of the moderating-mediation analysis show that working capital, perceived value and risk perception partially mediate the association between credit adoption and farmer satisfaction. The mediated effects are further moderated by farm advisory services and financial knowledge and skills.Research limitations/implicationsThe study is restricted in opportunity due to primary data, and it considers only farmers' perspectives to measure service quality and service features as constraints for institutional credit access.Practical implicationsThe government, nongovernment organizations, civil societies and private institutions should provide sufficient financial knowledge and training to the farmers via extension services to utilize the borrowed capital effectively to bring economic welfare and mental satisfaction.Originality/valueThe existing literature rarely considered banking service quality and service features (demand side) variables as determinants of credit access. Further, the study brings novelty in examining how the capital management cognitive factors of the formal credit adopters influence the relationship between credit access and satisfaction.

Influence of Lending Procedures on Credit Accessibility amongst Small and Micro Enterprises in Kenya: A Case of Meru Town

In Kenya, SMEs are businesses employing between 1-50 people and maybe either in formal or informal sectors and may also be in farm or non-farm categories. Due to the sector importance, Kenya has enacted several laws in support of SMEs. The SMEs require a concerted effort from both private and public since the sector draws stakeholders from both. To enhance their sustainability in the economy, the SMEs require serious empirical research in order to elicit the constraints with the goal of developing proactive remedial frameworks so that their existence may be promoted. Amongst the numerous challenges that constrain the working of SMEs is inadequate financing, thus the derivative of the overall goal of this study. The study location was Meru town. The descriptive research design was used. As per the Meru county government records, 160 SMEs are permitted and have been in operation for not less than 3 years. From every SME, one respondent was used. Census was adopted as the study design informed by the small population and the ease of reaching the respondents. A questionnaire was used to collect data through a drop-pick method which was done in three days’ time. Data analysis was through descriptive methods. Data analysis was assisted by SPSS version 22 by subjection to regression analysis to establish the existence of relatedness between the dependent and independent variables. Presentation of results was done through tables. Analysis done indicated the existence of crucial relations between the process of loaning. Regression analysis results indicated the loaning procedure had a significant effect on credit accessibility among SMEs in Meru Town. It was recommended further study to be conducted to find out the other determinants of credit accessibility amongst SMEs in Meru town.

Supply Chain Management Integration and Demand Management Practices on Organizational Performance of Kenya Medical Research Institute

In Kenya, SMEs are businesses employing between 1-50 people and maybe either in formal or informal sectors and may also be in farm or non-farm categories. Due to the sector importance, Kenya has enacted several laws in support of SMEs. The SMEs require a concerted effort from both private and public since the sector draws stakeholders from both. To enhance their sustainability in the economy, the SMEs require serious empirical research in order to elicit the constraints with the goal of developing proactive remedial frameworks so that their existence may be promoted. Amongst the numerous challenges that constrain the working of SMEs is inadequate financing, thus the derivative of the overall goal of this study. The study location was Meru town. The descriptive research design was used. As per the Meru county government records, 160 SMEs are permitted and have been in operation for not less than 3 years. From every SME, one respondent was used. Census was adopted as the study design informed by the small population and the ease of reaching the respondents. A questionnaire was used to collect data through a drop-pick method which was done in three days’ time. Data analysis was through descriptive methods. Data analysis was assisted by SPSS version 22 by subjection to regression analysis to establish the existence of relatedness between the dependent and independent variables. Presentation of results was done through tables. Regression analysis results indicated that the loaning procedure had a significant effect on credit accessibility among SMEs in Meru Town. It was recommended further study to be conducted to find out the other determinants of credit accessibility amongst SMEs in Meru town.

Evaluating credit accessibility predictors among small and medium contractors in the South African construction industry

The importance of small and medium construction enterprises (SMEs) in the South African economy has been recognised. However, construction SMEs are faced with difficulties in accessing credit from financial institutions. Furthermore, past research has failed to reach consensus on the demographic and socio-economic factors that predict credit accessibility for construction SMEs in South Africa. This study determines the predicting demographic and socio-economic factors for credit accessibility for construction SMEs from financial institutions in South Africa. A quantitative research approach was used and data was collected, using a questionnaire survey from 250 construction SMEs who were conveniently sampled. The demographic and company profile factors predicting credit accessibility were modelled and set as the independent variables with credit accessibility to the construction SMEs as the dependent variable, irrespective of the amount obtained from financial institutions. The data was analysed using the Statistical Package for the Social Sciences (SPSS) version 22. Binary logistic regression analysis was used to analyse the predictors of obtaining credit. In the first model, the results revealed that the credit accessed irrespective of the amount and those who did not receive credit at all, when modelled with the conceptualised predictors suggested, showed no significant predictors of obtaining credit. However, in the second model, when the conceptualised predictors were modelled with full and partial credit, the results established that age group, current position in the organisation, tax number and location were good predictors of obtaining full credit. The findings of this study cannot be generalised across South Africa, as the study was conducted only in the Gauteng province. The value of this study informs owners of SMEs in the construction industry to provide their age and current position in the organisation when applying for credit. They should also provide the tax number and the location of the business in order to improve their chances of obtaining full credit from financial institutions. Keywords : Credit accessibility, determinants of credit accessibility, full credit, small and medium enterprises

Determinants of credit access by smallholder farmers in North-East Benin

Financing agriculture is a key issue in rural development. Despite the efforts of the government to make credit services available and affordable in most of the rural areas, access to credit among smallholder farmers remains low. This paper analyzes the determinants of credit access by farmers in the North East, Benin. Primary data were collected from one hundred and twenty respondents randomly selected and interviewed through structured questionnaire. A Logit model was specified to identify the relationships between access to credit and selected farmers’ socio-economic characteristics. Following this, the marginal effects of the selected farmers’ socio-economic characteristics on the probability to access credit were estimated. The analysis revealed that access to credit among smallholder farmers is determined by the number of years of schooling, literacy, membership, guarantor, collateral and interest rate. For each additional year of schooling, the likelihood of access to credit was found to increase by 3.9% while literacy in the local language was found to increase the likelihood by 10.9%. Membership of farmers’ cooperatives was found to increase the likelihood of access to credit by 31% while having a guarantor increases this likelihood by 18.9%. However, the availability of collateral decreases the likelihood of credit access by 12.4% while credit with high interest rates decreases it by 11.7%. Thus, to improve rural farmers’ access to credit, governments and non-governmental organizations should promote education, literacy and cooperative membership among farmers. Moreover, financial institutions should also play a key role by keeping interest rates for loans at a low level. Key words: Smallholder farmers, credit, determinants, logit, Benin.

Determinants of SACCOOs Credit Accessibility in Kenya; A Survey of SACCOOs in Imenti North Sub County

The objective of SACCO’s is members’ empowerment through savings mobilization, disbursement of credit and ensuring long-term sustainability through prudent financial practices. A national survey conducted by Central bank of Kenya on financial access revealed that access to SACCO’s credit accessibility has reduced despite the increase in credit demand. This continuous decline in access to credit shows that SACCO’s members are not able to access the credit from their SACCO’s and they seek for credit from other financial institutions. The specific objectives that guided the study were to determine whether products range is a determinant of credit accessibility, to establish if collateral requirement is a determinant of credit accessibility, to determine if product characteristics is a determinant of credit accessibility and to establish if lending procedures is a determinant of credit accessibility in SACCO’s. The study adopted a descriptive research design which is concerned with describing the characteristics of a particular individual and census method was used. Data was collected through questionnaire. The test-retest method was conducted and correlation coefficient calculated using spearman's formula. The questionnaire was validated through a pilot with a sample of 10 respondents from SACCO’s in Nkubu town which is in Meru County. Descriptive statistics which includes mean and standard deviations were used to analyze data. The study also used logistic regression analysis to test the hypothesis and the p-value from test statistic was used to determine whether any differences could be attributed to the ordinary random factors or not. This was done using SPSS Version 22 where data collected was subjected to logistic regression. The study found that credit accessibility in Sacco’s is influenced by product range, collateral requirements, product characteristics and lending procedures. These findings were both supported by the frequencies of the responses from the respondents which were presented in the form of percentages and mean scores. On the credit accessibility parameters, product range and lending procedures had the highest positive influence on SACCO’s credit accessibility. The findings revealed that from 2011 to 2013, the number of loan applications received in SACCO’s from Imenti North Sub-County has dropped from significantly. This has affected the number of successful loan applications. The results of the analysis of the moderating variable revealed that government policies had a higher moderating influence on credit accessibility. The results also showed that the product range, collateral requirements, products characteristics and lending procedures can explain the changes in credit accessibility of SACCO’s in Imenti North Sub-County. The study recommends that SACCO’s should start investing in products innovation in order to ensure that they have a wide range of products which are tailor made to suit their client’s needs and develop a policy that allows members to use other forms of collateral at their disposal in order for them to qualify for higher loans that the ones guaranteed by their shares only. This will increase the number of members accessing credit and reduce the stiff competition that SACCO’s experience with the other credit service providers. SACCO’s should come up with ways of developing products that have features which will encourage their members to borrow loans. They should structure their repayment period to suit the ability of borrowers to pay. SACCO’s should simplify the lending procedures for members to be able to access credit. The lending procedure of having guarantors sign the borrower’s loan application form discourages members from accessing credit. SACCO’s should come up with the procedures other than limiting themselves to number of shares held and guarantors. Further study can be can be done in this area by increasing the scope of the study. Such scope would include other Sub- Counties in Kenya.

Analysis on determinants of rural household credit in China

The paper utilizes random survey data of rural households to analyze the determinants of credit access in China and to measure impact of borrowing behavior on households’ welfare. The results show that households characteristic, property level, social relation, trading cost and financial information affect both probability and amount of credit access. Income, occupation, less distance to market centers, popularized level of financial knowledge and degree of understanding credit polices of finance institutions are found to affect credit access positively. And age of head of household is found to have an inverse U-shape effect on credit access. Moreover, amount of credit access is found to have a significantly positively related to rural households’ welfare, when using “consumption expenditures of households in recent three years” and “whether credit can improve households economy situation or not” as the proxy variable of rural households welfare. However, the regional effect of this impact is not obvious. The other factors of educational level, occupation, less distance to market and financial information are positively related to welfare.

Determinants of Credit Accessibility by the Small Tea Growers: A Study in Golaghat District of Assam

Determinants of Credit Accessibility by the Small Tea Growers: A Study in Golaghat District of Assam

Determinants of Credit Access and Demand among Poultry Farmers in Akwa Ibom State, Nigeria

Determinants of Credit Access and Demand among Poultry Farmers in Akwa Ibom State, Nigeria

Determinants of Credit Access and Demand among Poultry Farmers in Akwa Ibom State, Nigeria

Determinants of Credit Access and Demand among Poultry Farmers in Akwa Ibom State, Nigeria

How do banks assess entrepreneurial competence? The role of voluntary information disclosure

This article explores relationship lending in the small business context: it discusses the roles of entrepreneurial competence and voluntarily disclosed information as determinants of credit access. More specifically, it proposes that the loan manager’s evaluation of the information voluntarily disclosed by the entrepreneur is an important complement to publicly available financial data and soft information collected through observation and third parties in framing the loan manager’s perception of entrepreneur competence. Further, the article argues that banks charge lower interest rates if the loan manager perceives the entrepreneur to be competent. Econometric analysis based on 433 bank–firm relationships supports these hypothesised relationships. The results imply that entrepreneurs need to communicate their competence effectively to loan managers, and that banks should utilise these personal evaluations as inputs to lending decisions.

Determinants of access to credit in Nigerian agriculture

This study was carried out in Oyo and Ondo States of South – Western Nigeria to investigate the determinants of households’ access to agricultural production credit under the National Special Programme for Food Security (NSPFS). A multi-stage sampling technique was used to select 600 farmers from 4 ‘local government areas’. Descriptive statistics and probit regression model were used to analyse the primary data obtained from the survey conducted. The findings of the study showed that majority (53.3%) of the farmers have access to NSPFS credit while the rest (46.7%) did not have access to credit under the programme. The result of the probit analysis showed that farmers’ age, access to other credit, access to extension services, financial contribution in his or her group, farm location, size of landholding and membership of registered farming group are the most important variables that significantly influenced access of households to NSPFS credit in the study area. The results further revealed that majority of the beneficiaries are old and those farmers whose farms are located outside the project catchment or NSPFS participating ‘local government areas’ did not have access to the credit. Most of the non-beneficiaries had no formal education and did not have access to extension services. Therefore, this study recommends that youth and younger population should have greater access to credit under the NSPFS. It was also recommended that relevant policies to address the constraints and limitations to formal education and extension services should be designed by stakeholders in agricultural development to increase households’ awareness and access to NSPFS credit. The scope of implementation of the programme should be expanded to cover more ‘local government areas’ to extend the benefit of the programme to reach majority of the poor farm households. Key words: National special programme for food security (NSPFS), credit access, probit regression model.

The Determinants of Credit Access and Its Impacts on Micro and Small Enterprises: The Case of Garment Producers in Kenya

There are diverse sources of credit for micro and small manufacturing enterprises (MSEs) in developing countries, ranging from relatives and friends, rotating savings and credit associations (ROSCAs), micro finance institutions, and commercial banks. Using a unique set of data on MSEs in garment clusters in Nairobi, this study attempts to identify the determinants of access to different credit sources and their impacts on firm profitability and growth. The results of the regression analysis demonstrate that factors determining access to credit are often different from those affecting enterprise performance, indicating limited impacts of credit access on enterprise performance.