Credit Accessibility and Performance of Small Scale Farms in Taita Taveta County, Kenya

Abstract

Agriculture is considered the backbone of the Kenyan economy since it contributes to approximately 25 percent of the gross domestic product. It earns a significant amount of foreign exchange since it provides for all food supplies in the country in addition to creating employment to almost 70 percent of the entire population in either a direct or an indirect manner. The study therefore focused on evaluating Agricultural credit as well as its effect on small scale farm production in Taita Taveta County. Its aim was to the effect of credit accessibility on performance of small scale farms in Taita Taveta County, Kenya. The specific objectives were to determine the loan pricing influence on small scale farms found in Taita Taveta County, to assess the impacts of loan repayment schedules on performance of small scale farming in Taita Taveta County, to evaluate the influence of record keeping on performance of small scale farming in Taita Taveta County, and to identify the impact of formal lending facilities availability on small scale farming performance in Taita Taveta County. In small scale production there are numerous challenges faced in small scale agriculture among them being lack of information as well as limited resources. In traditional or subsistence farming, there are no crop rotation practices since most of the farmers prefer mixed farming that entails same crop production in all the seasons which in turn leads to the buildup of pest and diseases. As a result, investigations needed to be done to identify the agricultural credit impact in ASAL areas since different regions suffer in different ways. In other words, this study is meant to assess the Agricultural credit and its influence on farms performance in Taita Taveta County, Kenya. The study was anchored on the trade- off theory of capital structure, the theory of Information Asymmetry, Adverse Selection Theory, the Pecking Order Theory, and the demand and Supply Theory. The study utilized descriptive review method. The research targeted 1101 small scale farms living in 4 sub counties across the county. Therefore, a 111 sample size made of small scale farms was used to represent the target population by the use of simple arbitrary sampling to provide for every member of the target population. The data was gathered by using a self-administered questionnaire, analyzed by use of descriptive statistics utilizing graphs and tables. SPSS was used to analyze data through a regression model.