The results of the descriptive analysis revealed a significant mean difference between the defaulter and non-defaulter households in terms of education, experience of credit use, distance from credit source, technical assistance, livestock units, total annual income and total land.
Loan defaults are estimated at Therefore, the objective of this study was to identify the factors affecting the loan repayment performance of farmers in Eastern Hararghe zone. Primary data was collected through structured questionnaires, from randomly selected farm household users of credit in two agro ecological zones of Eastern Hararghe.
Credit repayment is of paramount importance to have viable financial institutions. Agro ecological zone, off-farm activity, and frequency of contact with extension agents positively and significantly influenced loan repayment while, production loss, informal credit, social ceremonies, and loan-income ratio negatively influenced Factors affecting the loan repayment of loan repayment performance of small holder farmers in the study area.
Rural development strategies should not only emphasize on increasing agricultural production but simultaneous attention should be paid to promoting off-farm activities in the rural areas. However, other variable such as age, family size, amount of loan, were not significantly different between the defaulters and the non-defaulters.
Moreover, off farm income, crop and livestock disease, social ceremonies and education level were systematically associated with loan repayment.
Descriptive statistics were used to describe the socio-economic characteristics of the respondents, and the two-limit Tobit model was used to analyze the factors influencing loan repayment of smallholder farmers in the study area. The social ceremonies which are commonly celebrated, require a great deal of investment ,beyond what the farmers can afford, and were found to be one of the major causes of delinquency in the payment of formal loans.
In addition membership of specific groups should be optional, to allow individual members to screen each other effectively, a phenomenon of group advantage for information symmetry that is not available in the emerging micro finance set ups which fix members to groups.
The agro-ecology zone is one of the factors that affect the type and range of crops to be grown and animals to be kept. Facebook Twitter Google Plus Yahoo LinkedIn Digg Delicious Abstract The use of credit has been envisaged as one way of promoting technology transfer, while the use of recommended farm inputs is regarded as key to agricultural development.
Therefore, policies and strategies geared towards the development and promotion of new technologies, suitable to moisture deficit areas, should be given adequate emphasis in order to improve the loan repayment capacity of smallholder farmers living in such drier areas of the zone.
However, there is a serious loan repayment problem in the area, which discourages rural finance organizations from promoting and extending credit.
Secondary data was obtained from publications, seasonal and annual reports of the district, zonal and regional offices of the Ministry of Agriculture and Rural Development, Development Bank of Ethiopia, Micro Finance Office and other related organizations.
The two limit Tobit model results indicated that seven out of the 16 explanatory variables considered influenced loan repayment performance in the area. In Eastern Hararghe, Oromiya Zone, the Regional Government and Non-Governmental organizations are extending credit facilities to farming households in order to narrow the gap between the capital required and the capital that the households possess, for the improvement of agricultural technologies that would increase production and productivity.Factors Influencing Agriculture Loan Repayment by Small Farmers, a case study on Farta Woreda, South Gondar, Ethiopia, is based on primary and secondary data.
Xi = is a vector of independent variables (factors affecting loan repayment and Intensity of loan recovery) βi = Vector of unknown parameters εi = Residuals that are independently and normally distributed with mean zero and a common variance σ2, and i= 1, 2 n (n is the number of observations).
The purpose of this study was to determine the factors influencing loan repayment default in Micro-Finance Institutions within Meru ultimedescente.comr the specific objectives of the study were to: i). Investigate the client characteristics that influence loan repayment in Micro-Finance Institutions.
ii). FACTORS AFFECTING LOAN REPAYMENT PERFORMANCE OF SMALLHOLDER FARMERS IN EASTERN HARARGHE, ETHIOPIA Share: Facebook Twitter Google Plus Yahoo LinkedIn Digg Delicious. Abstract. The use of credit has been envisaged as one way of promoting technology transfer, while the use of recommended farm inputs is.
To determine the factors affecting loan repayment among customers of commercial banks in Kenya Research Objectives The study was guided by the following three research objectives: i.
To determine the effect of lenders’ factors on loan repayment among customers of commercial banks in Kenya ii. International Journal of Applied Science and Technology Vol. 3 No. 3; March 80 Factors Influencing Loan Repayment Default in Micro-Finance Institutions: The Experience of Imenti North District, Kenya.Download