Credit service utilization fills the gap of finance and improves agricultural technology use. However, limited use of credit enhances low level of living due to low productivity and income. The study was conducted to analyze smallholder farmers’ credit service utilization in case of Omo microfinance in Mareka District, Dawuro Zone, SNNPRS, Ethiopia. Multi-stage sampling technique was used to select 4 rural kebeles out of 33 kebeles which covered 12% of the total kebeles in the District. Primary data was collected from 142 sample households. Structured questionnaire was used to collect the data. For secondary data collection, reviewing of published and unpublished documents were conducted. For quantitative data analyses, descriptive statistics was used such as mean, standard deviation, percentage, and frequency distribution. The Binary logit model was used to analyze the determinants of the credit service utilization. The descriptive statistical analysis result showed that out of 142 smallholder farmers, 56% farmers were credit users, whereas 44 were non-users. Among the 17 predictors included in the logit model, 9 were significant at (p<0.1) probability level. The marital status, fixed asset, cooperative membership, mass media use, saving habit, lending procedure, family size and loan repayment period found to be highly important variables influencing credit service utilization. Therefore, credit service providers and office of agriculture should give attention to factors that significantly influence credit service utilization, problems contribute to miss-use and negative perceptions of rural farmers on credit services.

Keywords: Credit Service utilization, Smallholder farmers, Omo Microfinance, Mareka District, Binary logit, Ethiopia