Analysis of the use of credit facilities by small-scale fish farmers in Kenya
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Date
2010
Authors
Kwamena, K. Quagrainie
Ngugi, Charles C.
Amisah, Stephen
Journal Title
Journal ISSN
Volume Title
Publisher
Springer
Abstract
The government of Kenya encourages aquaculture development by offering
credit facilities through the government agricultural finance institution, Agriculture
Finance Corporation. Nevertheless, the level of credit use in fish farming is very low.
Access to credit is among several factors that affect farmers’ decision of whether to use
particular technology or services. The study examined factors that affected the decision of
fish farmers in Kenya to utilize credit facilities in fish production using a probit model. The
analysis suggests that farmers in the Western province will have a 19% more probability of
using credit facilities for their fish farming operations than farmers from the other provinces
such as the Rift Valley, Central, and the Eastern province. The effect of tilapia sales
on the probability of credit use by fish farmers is more than three times that of catfish sales.
Total pond acreage owned by fish farmers had a positive effect on credit use but the effect
was very small and negligible. The level of fish farmers’ use of credit facilities is very low,
and there is probably the need to educate farmers on credit use and for the government
agricultural lending agency and other commercial agricultural lenders to invest in this
enterprise. Kenyan lending institutions have financed traditional agricultural enterprises,
and with the growing production of farmed fish, more research is needed to document the
aquaculture business model to assist in assessing the profitability potential in aquaculture.
Description
Publisher version (Springer) available at link.springer.com/article/10.1007%2Fs10499-009-9252-8
Keywords
Aquaculture, Credit, Probit analysis
Citation
Aquaculture International (2010) 18:393–402 123