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Factors affecting access to agricultural credit and the size of agricultural credit for smallholder farmers in Zimbabwe

Author

Listed:
  • Authur Masuka

    (Marondera University of Science and Technology (MUAST))

  • Tanyaradzwa Rukasha

    (Marondera University of Science and Technology (MUAST))

  • Simbarashe Tatsvarei

    (Marondera University of Science and Technology (MUAST))

Abstract

Access to agricultural credit is essential for increasing the productivity and livelihoods of smallholder farmers in Zimbabwe. Nevertheless, persistent systemic challenges constrain access to and the amounts of loans available to the farmers. This study explores the key determinants of access to agricultural credit and loan amounts offered to farmers in Mashonaland East province. Using a double-hurdle model, the study analyzes the decision to apply for credit and determinants of loan amounts obtained. Findings indicate that farm size, age, membership in savings groups, and financial literacy are significant factors in credit access, while collateral requirements and perceived risk remain significant barriers. Larger farms and savings group membership were positively associated with loan sizes. The research highlights the need for inclusive credit policies, flexible collateral conditions, and digital financial services to bridge the financing gap. Overcoming these challenges is crucial in fostering financial inclusion and developing the agricultural sector in Zimbabwe.

Suggested Citation

  • Authur Masuka & Tanyaradzwa Rukasha & Simbarashe Tatsvarei, 2025. "Factors affecting access to agricultural credit and the size of agricultural credit for smallholder farmers in Zimbabwe," African Journal of Commercial Studies, African Journal of Commercial Studies, vol. 6(3).
    • Handle: RePEc:cwk:ajocsk:2025-61
    DOI: 10.59413/ajocs/v6.i3.6
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    References listed on IDEAS

    as
    1. Vandana Sehgal, 2024. "Determinants of rural credit in India: evidence from a large-scale sample survey," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 52(6), pages 839-854, August.
    2. Ma, Wanglin & Rahut, Dil Bahadur & Sonobe, Tetsushi & Gong, Binlei, 2024. "Linking farmers to markets: Barriers, solutions, and policy options," Economic Analysis and Policy, Elsevier, vol. 82(C), pages 1102-1112.
    3. Ninsiima, R & Bulyaba, R & Makosa, D, 2023. "Determinants of participation in agricultural group guarantee loans: a case of smallholder farmers in eastern Uganda," African Journal of Food, Agriculture, Nutrition and Development (AJFAND), African Journal of Food, Agriculture, Nutrition and Development (AJFAND), vol. 23(4), January.
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