The Agricultural Credit Accessibility By Smallholder Farmers

In the growth of most developing countries’ economies,for example in Ghana,agriculture is the fundamental sector that helps in the rise of human development whereby farm product surpluses and revenue generated enable people to live to reduce food insecurity and poverty alleviation.The agriculture sector in Ghana contributes 50% to the growth of domestic products and also employs almost 60% of the workforce.The Ghanaian agricultural sector is predominantly made up of smallholder farmers who produce 80 percent of the sector’s output but still use the outmoded method or system of farming,using unimproved seedlings,equipment(hoe,cutlass),and fertilizers due to inadequate funds.Agricultural credit is an essential input along with modern technology for increased farm productivity hence serves as an intervention to eradicate rural poverty and increase agricultural growth,unfortunately in Ghana,the agricultural sector lacks access to credit which is the most important instrument in the growth of agriculture.The smallholder farmers have been excluded from the financial inclusion due to most of the smallholder farmers having no bank account,collaterals,or guarantors,and another requirement in acquiring credit.Due to these challenges facing smallholder farmers’ access to agricultural credit,the study sought to explore smallholder farmers’ awareness and their accessibility toward agricultural credit facilities in the eastern Region of Ghana.The study assessed the heterogeneous effect of the factors on the source of agricultural credit(formal and informal)and the gender composition.The choice and the attribution theory were adopted due to their fitness for the study.The conceptual framework was derived based on the two theories considered in the study and the empirical studies reviewed on the determinants of agricultural credit which allied with the objectives of the study.The study utilized the quantitative research design.The target population was the entire smallholder farmers in the study area in Ghana.A total of four hundred(400)participants were randomly sampled from4 selected districts and municipalities in the Eastern region of Ghana(Asuogyaman,WestAkim,Suhum,and Birim South).Secondly,random sampling was done using seemly unrelated regression to select four(4)communities or villages from each district or municipality to arrive at sixteen(16)villages or farming communities to avoid sample selection bias.Both primary and secondary data were used.Well-structured questionnaires used for the survey were adapted from related studies in this area.Frequencies and percentages were employed for the descriptive statistics to measure the socio-economic characteristics of the smallholder farmers access to agricultural credit as well as the type of farming activities engaged in the study area.A statistical test like the binary logistics regression model was used to predict whether or not smallholder farmers’ access to agricultural credit in the formal and informal source of credit and the gender composition is influenced by the determinants considered for the study.According to the findings of this study,it can be concluded that there are a lot of factors that influence the smallholder accessibility for agricultural credit.The model in the general scope showed a significant relation between the determinant and accessibility with the farmers’ gender,age,education,household size,and distance.On the other hand,the informal source of credit showed significant determinants such as the farmer’s age,group membership,land ownership,and farm size.The determinants that influence smallholder farmer’s accessibility to formal agricultural credit are the farmer’s gender,level of education,savings with the facility,land ownership,farm size,and distance to the nearest agricultural credit facility.The gender composition revealed that male smallholder farmers’ accessibility to agricultural credit is influenced by education,marital status,farming experience,and household size.Lastly,the female smallholder farmer is likely to access agricultural credit based on marital status,off-farm job,and group membership.This asserts that smallholder farmer’s accessibility to agricultural credit depends on these determinants for the purpose and the study area.The study gives insightful consequences of the accessibility of agricultural credit to smallholder farmers and suppliers.This study adds to knowledge by highlighting the relative determinants of agricultural credit by the smallholder farmers.The study therefore suggests that suppliers,borrowers,and other interested stakeholders should be able to improve and intervene in financial inclusion.The study further recommends that stakeholders in the agricultural industry such as MOFA,NGOs,FAO etcetera should include in their sensitization programs ways of enhancing farmers to adopt better farm management practices since they are variables influencing farmers’ use of credit.The group membership association should also exhibit the habit monitoring their group members on credit,thus,there will be improvement in their credit use and grant access to more members.