Group-Based Credit Re-payment: Evaluation of Factors for Default Among Smallholder Farmers in Nakuru District, Kenya
International Journal of Agricultural Economics
Volume 1, Issue 1, May 2016, Pages: 1-9
Received: Feb. 29, 2016; Accepted: Mar. 16, 2016; Published: Apr. 14, 2016
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Richard O. Akuno Nyang’aya, Department of Accounting, Finance and Management Science, Egerton University, Egerton, Kenya
George Owuor, Departmnt of Agricultural Economics and Agribusiness Management, Egerton University, Egerton, Kenya
Emilly Moraa, Department of Accounting, Finance and Management Science, Egerton University, Egerton, Kenya
David O. Ayieko, Department of Agribusiness Management and Trade, Kenyatta University, Nairobi, Kenya
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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.
Default, Credit, Micro Finance, Groups, Interest
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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, International Journal of Agricultural Economics. Vol. 1, No. 1, 2016, pp. 1-9. doi: 10.11648/j.ijae.20160101.11
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