agricultural credit; small scale farmers; Southern Province; Rwanda
Abstract :
[en] This study investigated the determinants of financial inclusion for small scale farmers by
focusing on the access to formal and informal agricultural credits in the Southern Province of
Rwanda. Data were collected from 310 farmers from Huye and Nyamagabe districts through
an open-ended structured questionnaire and analysed using the binary logistic regression
method. The major findings, on one hand, showed that among the requested and approved
agricultural loans, 87.2% and 12.7% were from informal and formal financial institutions
respectively. Among those who accessed agricultural credits, 59.7% were from Huye and
40.3% from Nyamagabe. On the other hand, it was revealed that the household characteristics
and the community attributes are the most important determinants. Those household
characteristics include household income and expenditure, Ubudehe socio-economic category
of the household, off-farm employment and the size of the land owned by the household
whereas community attributes involve residence area, transport and informal financial
services availability. Regarding farmer characteristics, the education level was found to be the
only factor affecting the smallholder farmers' access to agricultural credit. In light of the
findings, it was recommended to conduct sensitization sessions focusing on the importance of
agricultural credits for smallholder farmers especially in the areas with high level of poverty.
In addition, there is need to work on alleviating the formal agricultural credits access barriers,
and to conduct a study on the dynamics of informal and formal agricultural credits up take
and usage by smallholder farmers to explore all dimensions of financial inclusion in the study
area.
