Determinants of Access to Credit and Performance of Smallholder Farmers in Kumba Municipality, South West Region of Cameroon

Takwa Abonwi Chenaa, Anyik Geena Maria and Maclean Nkiemboupoh Teno

Asian Journal of Agricultural Extension, Economics & Sociology, 2018, vol. 25, issue 1

Abstract: Like any other developing country in the world agriculture is the main economic activity of Cameroon. This sector is mainly dominated by smallholder farmers. Unfortunately, accessibility to finance is among the major drawbacks, which have implications to productivity hence income of smallholder farmers. This study was aimed at investigating the determinants of access to credit on the performance of smallholder farmers in the Kumba municipality. Specifically, the study sought to examine (1) collateral security, (2) cost of credit facility and (3) knowledge/awareness of financial procedures on the performance of smallholder farmers. The study adopted a descriptive survey research design. Using a multi-stage sampling procedure, 272 questionnaires were administered to smallholder farmers in the Kumba municipality. The data was analysed descriptively with the use of frequency tables and inferentially, using the multiple regression analysis. The findings revealed that collateral security, cost of credit facilities and knowledge/awareness of financial procedures have a significant impact on the performance of smallholder farmers as indicated by the t-values of 4.74, 4.73 and 17.43 respectively. An F-statistics of 21.19, greater than the critical F-value of 3.157 was obtained, implying that there exists a significant relationship between the determinants of access to credit (collateral security, cost of capital and knowledge and awareness of financial procedures) and performance of small holder farmers in the Kumba municipality. The study recommended amongst others that government should provide exclusive financial services to farmers and also ensure the smooth running and establishment of policies governing agriculture. Micro financial institutions should provide financial literacy to smallholder farmers and also develop new financial products that will cater for the needs of smallholder farmers particularly in Kumba municipality and Cameroon as a whole.

Keywords: Agricultural; Finance (search for similar items in EconPapers)
Date: 2018
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