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Group-Based Credit Re-payment: Evaluation of Factors for Default Among Smallholder Farmers in Nakuru District, Kenya

Received: 29 February 2016     Accepted: 16 March 2016     Published: 14 April 2016
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Abstract

Agriculture contributes 23% to the Gross Domestic Product (GDP) of Kenya and is practiced by 80% of the rural population. At least 50% of smallholder farmers are constrained in accessing quality inputs due to inadequate credit. In addition most farmers default on the repayment of loans. Therefore this study aimed at determining the level and determinants of default in payment of loans among the farmer group members in Nakuru. The study used a multi stage sampling technique to sample 50 farmer group members. The data was collected using a pretested questionnaire and the data analysed using descriptive and qualitative methods. The results of the Logit regression showed that the default in repayment of loans is significantly affected by the level of education, age of the group, farm income and interest rate. Therefore it is recommended to increase farmer group trainings, adopt technologies to raise production and reduce interest rates on loans.

Published in International Journal of Agricultural Economics (Volume 1, Issue 1)
DOI 10.11648/j.ijae.20160101.11
Page(s) 1-9
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This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

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Copyright © The Author(s), 2016. Published by Science Publishing Group

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Keywords

Default, Credit, Micro Finance, Groups, Interest

References
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  • APA Style

    Richard O. Akuno Nyang’aya, George Owuor, Emilly Moraa, David O. Ayieko. (2016). Group-Based Credit Re-payment: Evaluation of Factors for Default Among Smallholder Farmers in Nakuru District, Kenya. International Journal of Agricultural Economics, 1(1), 1-9. https://doi.org/10.11648/j.ijae.20160101.11

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    ACS Style

    Richard O. Akuno Nyang’aya; George Owuor; Emilly Moraa; David O. Ayieko. Group-Based Credit Re-payment: Evaluation of Factors for Default Among Smallholder Farmers in Nakuru District, Kenya. Int. J. Agric. Econ. 2016, 1(1), 1-9. doi: 10.11648/j.ijae.20160101.11

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    AMA Style

    Richard O. Akuno Nyang’aya, George Owuor, Emilly Moraa, David O. Ayieko. Group-Based Credit Re-payment: Evaluation of Factors for Default Among Smallholder Farmers in Nakuru District, Kenya. Int J Agric Econ. 2016;1(1):1-9. doi: 10.11648/j.ijae.20160101.11

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  • @article{10.11648/j.ijae.20160101.11,
      author = {Richard O. Akuno Nyang’aya and George Owuor and Emilly Moraa and David O. Ayieko},
      title = {Group-Based Credit Re-payment: Evaluation of Factors for Default Among Smallholder Farmers in Nakuru District, Kenya},
      journal = {International Journal of Agricultural Economics},
      volume = {1},
      number = {1},
      pages = {1-9},
      doi = {10.11648/j.ijae.20160101.11},
      url = {https://doi.org/10.11648/j.ijae.20160101.11},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijae.20160101.11},
      abstract = {Agriculture contributes 23% to the Gross Domestic Product (GDP) of Kenya and is practiced by 80% of the rural population. At least 50% of smallholder farmers are constrained in accessing quality inputs due to inadequate credit. In addition most farmers default on the repayment of loans. Therefore this study aimed at determining the level and determinants of default in payment of loans among the farmer group members in Nakuru. The study used a multi stage sampling technique to sample 50 farmer group members. The data was collected using a pretested questionnaire and the data analysed using descriptive and qualitative methods. The results of the Logit regression showed that the default in repayment of loans is significantly affected by the level of education, age of the group, farm income and interest rate. Therefore it is recommended to increase farmer group trainings, adopt technologies to raise production and reduce interest rates on loans.},
     year = {2016}
    }
    

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    T1  - Group-Based Credit Re-payment: Evaluation of Factors for Default Among Smallholder Farmers in Nakuru District, Kenya
    AU  - Richard O. Akuno Nyang’aya
    AU  - George Owuor
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    DO  - 10.11648/j.ijae.20160101.11
    T2  - International Journal of Agricultural Economics
    JF  - International Journal of Agricultural Economics
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    UR  - https://doi.org/10.11648/j.ijae.20160101.11
    AB  - Agriculture contributes 23% to the Gross Domestic Product (GDP) of Kenya and is practiced by 80% of the rural population. At least 50% of smallholder farmers are constrained in accessing quality inputs due to inadequate credit. In addition most farmers default on the repayment of loans. Therefore this study aimed at determining the level and determinants of default in payment of loans among the farmer group members in Nakuru. The study used a multi stage sampling technique to sample 50 farmer group members. The data was collected using a pretested questionnaire and the data analysed using descriptive and qualitative methods. The results of the Logit regression showed that the default in repayment of loans is significantly affected by the level of education, age of the group, farm income and interest rate. Therefore it is recommended to increase farmer group trainings, adopt technologies to raise production and reduce interest rates on loans.
    VL  - 1
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Author Information
  • Department of Accounting, Finance and Management Science, Egerton University, Egerton, Kenya

  • Departmnt of Agricultural Economics and Agribusiness Management, Egerton University, Egerton, Kenya

  • Department of Accounting, Finance and Management Science, Egerton University, Egerton, Kenya

  • Department of Agribusiness Management and Trade, Kenyatta University, Nairobi, Kenya

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