Analysis of Factors Enhancing Credit Utilization Among Lowly Endowed Women Farmers

James Obara


Credit is an important aspect in farming. The problem is the restricted accessibility to farm credit by the Lowly Endowed Women (LEW) farmers. The banks and other formal lending institutions consider LEW farmers a risk and/ or not credit worth. To be unveiled yet are the strategies and interventions that ought to be put in place so as to enhance credit use by Lowly Endowed Women farmers. The research was done on women farmers in Funyula Sub County, Busia County, Kenya. A sociological inquiry, in form of a survey was used to collected field data based on the views of the LEW farmers on the various credit  arrangements to determine which ones were acceptable and could lead to both  effective use of credit and high.  In addition to the field survey, case studies were carried out for additional data and to strengthen the findings of the field survey. The target population was the women farmers. All the 15,000 households Funyula Sub County (Ministry of Agriculture, 1997) constituted the accessible population. The study assumed every household had a woman.  For case studies, the study population was chosen from the on-going or immediate past rural programmes with an informal credit component for lowly endowed people, particularly the women. Sampling of the household was undertaken using a proportionate, stratified random sampling technique on sub locational basis. The sub county had 28 sub locations. All the Sub Locations were represented in the study. A sample of 210 LEW farmers was taken. For the case studies, agencies that had a credit component for the lowly endowed people were selected. Three credit programmes run by two agencies with fairly successful record of credit support to the poor were studied. These agencies included an NGO, Kenya Rural Enterprise Programme (K-REP) and a government/ bilateral donor assisted agency, the DANIDA which supported Kitui Agricultural Project (KAP). Field data was collected by the researcher. The Statistical Package for the Social Sciences (SPSS) was used to aid the  analysis of the data.  Chi-square  was used to test the relationship between the variables. The level of significance for the relationship between variables was rejected or accepted at p ≤ 0.05 significant level. The findings of the study were: There is no significant relationship between conditional credit and effective use of credit.  However, there is a positive relationship between unconditional credit but with strict supervision by the credit agency and effective use of credit. The result of relationship between pre-training and use of credit indicated is a positive relationship between pre-training and effectiveness of credit use. On credit in-kind, it was found to be positive relationship implying credit in-kind is put to effective use by the LEW farmers.

Keywords: Credit utilization, Lowly Endowed Women, Farmers

DOI: 10.7176/JESD/11-4-08

Publication date: February 29th 2020

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