EconPapers    
Economics at your fingertips  
 

Microcredit repayment among smallholder farmers: what microfinance institutions need to know

Emmanuel Tetteh Jumpah, Emmanuel Kojo Tetteh and Abdulai Adams
Additional contact information
Emmanuel Tetteh Jumpah: Council for Scientific and Industrial Research-Science and Technology Policy Research Institute, Cantonments-Accra, Ghana
Emmanuel Kojo Tetteh: Council for Scientific and Industrial Research-Science and Technology Policy Research Institute, Cantonments-Accra, Ghana
Abdulai Adams: Council for Scientific and Industrial Research-Science and Technology Policy Research Institute, Cantonments-Accra, Ghana

Asian Journal of Agriculture and rural Development, 2018, vol. 8, issue 2, 74-91

Abstract: Microcredit default among borrowers has been rising in recent years but empirical evidence to ascertain the factors determining repayment remain lacking especially in developing countries like Ghana. This study contributes to addressing this knowledge gap. The study used data of 224 microcredit borrowers from Ada West and Ada East districts to analyse factors determining repayment rate among smallholder farmer borrowers. Applying the logistic regression model, farmer and credit specific characteristics were used to analyse the determinants of microcredit repayment. From the logistic regression, age, gender, income, and number of dependants increase the likelihood of repayment. However, membership of farmer based organization, experience, interest rate, and duration of loan repayment negatively influences loan repayment. The study also found delays in loan disbursement resulted in loan use for unproductive ventures and repayment challenges. In addition, lack of training for borrowers on credit management, and investment procedures adversely impacted on loan repayment. The paper recommends that MFIs should institute measures to train borrowers on loan utilization, focus on women clients, since they have higher probability of repayment, reduce interest rate as well as putting in place mechanisms to reduce cost of operations.

Keywords: Microcredit; Repayment; Smallholder farmers; Determinants; Lenders; Borrowers (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.aessweb.com/download.php?id=4308 (application/pdf)
http://www.aessweb.com/journals/5005/July2018 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:asi:ajosrd:2018:p:74-91

Access Statistics for this article

Asian Journal of Agriculture and rural Development is currently edited by Kashif Imran

More articles in Asian Journal of Agriculture and rural Development from Asian Economic and Social Society Sadeeq Block, Near Fawara Chowk, Abbasia Town, Rahim Yar Khan - 64200, Punjab, Pakistan.
Bibliographic data for series maintained by Chan Hoi Yan ().

 
Page updated 2019-05-02
Handle: RePEc:asi:ajosrd:2018:p:74-91