An analysis of determinants of access to and use of credit by smallholder farmers in Suakoko District, Liberia

Roberts LC, Otieno DJ, Nyikal RA. "An analysis of determinants of access to and use of credit by smallholder farmers in Suakoko District, Liberia." African Journal of Agricultural Research. 2017;12(24): 2093-2100.


Agricultural credit has been argued to be very important for sustainable agricultural development and poverty reduction in rural areas. This study seeks to identify and to analyze the determinants of smallholder farmers’ access to and use of credit in Suakoko district, Bong County, Liberia. This research is quantitative using a survey questionnaire distributed to 105 smallholder farmers. Data was analyzed using descriptive statistics and causal analysis was performed using a binary Logit regression model. Results from regression indicate that 39% of the farmers were credit users. The marginal effects of bank account and other sources of income show significant and positive effects on access to credit. However, education, occupation and group membership are significant but have negative effects on access to credit by smallholder farmers. The results also show that 38% of credit users applied credit received for agricultural activities, while the rest utilized it for non-agricultural activities. It is recommended that a policy should be established to ensure older farmers gets adult literacy while younger farmers get formal education. Moreover, the government should issue a policy aimed at increasing opportunities for off-farm activities through creation of jobs and motivating self-employment. Finally, the government should promote the creation of development groups geared towards providing collateral support for members and also serve as guarantors for farmers to receive banks credit/loans in order to increase agricultural productivity in the study area.

Key words: Credit access, rural, farmers, smallholder, Suakoko district, Liberia.


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