Analysis of Factors Influencing Microfinance Credit Uptake among Smallholder Coffee Farmers in Tharaka Nithi County, Kenya

Abstract

Microfinance institutions play a critical role in improving production and productivity of smallholder farmers by availing necessary financial resources when needed. Despite the benefits of microfinance credit on production, its uptake and use in the study region is still low. Consequently, it’s not known what factors influence the uptake and use of microfinance credit among smallholder coffee farmers in Tharaka Nithi county. The objective of this study was to find out the factors that influence the uptake of micro finance credit among smallholder farmers in Tharaka Nithi County. A total of 390 smallholder coffee farmers were selected through multi-stage sampling procedure. Primary data was collected by the use of structured questionnaires. Both descriptive and probit regression methods were used to analyze data. Results indicated that coffee farming experience, gender of the household head, number of coffee trees and access to extension services had significant influence on the uptake of microfinance credit. In conclusion any agricultural policy intervention on financing smallholder coffee farmers should focus on these factors to enhance uptake and efficiency in management.