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Determinants of Access to Credit and Performance of Smallholder Farmers in Kumba Municipality, South West Region of Cameroon

Author

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  • Chenaa, Takwa Abonwi
  • Maria, Anyik Geena
  • Teno, Maclean Nkiemboupoh

Abstract

Like any other developing country in the world agriculture is the main economic activity of Cameroon. This sector is mainly dominated by smallholder farmers. Unfortunately, accessibility to finance is among the major drawbacks, which have implications to productivity hence income of smallholder farmers. This study was aimed at investigating the determinants of access to credit on the performance of smallholder farmers in the Kumba municipality. Specifically, the study sought to examine (1) collateral security, (2) cost of credit facility and (3) knowledge/awareness of financial procedures on the performance of smallholder farmers. The study adopted a descriptive survey research design. Using a multi-stage sampling procedure, 272 questionnaires were administered to smallholder farmers in the Kumba municipality. The data was analysed descriptively with the use of frequency tables and inferentially, using the multiple regression analysis. The findings revealed that collateral security, cost of credit facilities and knowledge/awareness of financial procedures have a significant impact on the performance of smallholder farmers as indicated by the t-values of 4.74, 4.73 and 17.43 respectively. An F-statistics of 21.19, greater than the critical F-value of 3.157 was obtained, implying that there exists a significant relationship between the determinants of access to credit (collateral security, cost of capital and knowledge and awareness of financial procedures) and performance of small holder farmers in the Kumba municipality. The study recommended amongst others that government should provide exclusive financial services to farmers and also ensure the smooth running and establishment of policies governing agriculture. Micro financial institutions should provide financial literacy to smallholder farmers and also develop new financial products that will cater for the needs of smallholder farmers particularly in Kumba municipality and Cameroon as a whole.

Suggested Citation

  • Chenaa, Takwa Abonwi & Maria, Anyik Geena & Teno, Maclean Nkiemboupoh, 2018. "Determinants of Access to Credit and Performance of Smallholder Farmers in Kumba Municipality, South West Region of Cameroon," Asian Journal of Agricultural Extension, Economics & Sociology, Asian Journal of Agricultural Extension, Economics & Sociology, vol. 25(1).
    • Handle: RePEc:ags:ajaees:356957
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    References listed on IDEAS

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    1. Okten, Cagla & Osili, Una Okonkwo, 2004. "Social Networks and Credit Access in Indonesia," World Development, Elsevier, vol. 32(7), pages 1225-1246, July.
    2. Fidelis Kedju Akanga, 2017. "Microfinance accountability in Cameroon: a cure or a curse for poverty alleviation?," Journal of Accounting & Organizational Change, Emerald Group Publishing Limited, vol. 13(1), pages 112-130, March.
    3. Mandiefe, Piabuo Serge, 2015. "The impact of financial sector development on economic growth: analysis of the financial development gap between Cameroon and South Africa," MPRA Paper 64694, University Library of Munich, Germany.
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