Journal of
Development and Agricultural Economics

  • Abbreviation: J. Dev. Agric. Econ.
  • Language: English
  • ISSN: 2006-9774
  • DOI: 10.5897/JDAE
  • Start Year: 2009
  • Published Articles: 544

Article in Press

Determinants of microcredit use among small-scale farmers in Ethiopia: Evidence from Raya kobo Woreda, Ethiopia.

Abate Belaye Tefera

  •  Received: 22 January 2021
  •  Accepted: 16 July 2021
Introduction: most developing countries rely on agriculture for employment creation and income generating activities and the output from agriculture is also high compared to other sectors of the economy. However access to microcredit service is the bottle neck problem and this study addresses the determinants of micro-credit use among small-scale farmers in Ethiopia at a specific woreda of Raya kobo. Methodology: This research was conducted with the help of binary logistic regression model and the primary data collected from 385 small scale farm household heads were analyzed through it. Discussion of results: the logistic regression model shows that gender, age, education, family size, dependency ratio, oxen ownership, irrigation, extension service, membership of the social organization, total asset, remittance, economic shocks, the purpose of credit use, perception for group lending, organizational procedures and distance from the town were important factors influencing small-scale farmers to access microcredit in the study area. Other factors such as marital status, farm size and soil fertility were less powerful in explaining smallholder farmers’ access to microcredit loans. Conclusion: The study concludes that the expansion of irrigation schemes and reduction of bureaucratic procedures to develop new rural institution seemingly play a possible role in the creation and expansion of non-farm activities and in increasing access to microcredit

Keywords: Irrigation scheme, Logistic regression, Micro-credit, Raya kobo