Factors Influencing Access to Agricultural Credit by Small-Scale Dairy Farmers in Githunguri Sub-Location, Kiambu County (Published)

Article Author: Njiru Daisy, and Mwikamba Kaibui

Small-scale enterprises have often been ignored by financiers when issuing credit, merely for lack collateral and financial farm records. These enterprises are often overlooked because of the difficulties that are encountered in administering credit, the risk involved and the default rate among borrowers. Though Small Dairy Farmers contribute over 60% of all the milk that Kenya produces annually, they still continue to face challenges accessing agricultural credit compared to the larger, well-established dairy firms. This study, sought to evaluate how collateral availability, farm management skills of the farmer and the interest charged on credit influence small-scale dairy farmers (SDFs) access credit in Githunguri Sub-location, Kiambu County. The study design adopted was the descriptive one with Githunguri Sub-location being the specific location of the study. A sample size of 100 respondents were selected using simple random sampling. Personal interviews were used to collect primary data using personally administered questionnaires while the analysis was done using Multiple Linear Regression, and Statistical Package for Social Sciences (SPSS).The findings revealed that a unit increase in the farmers’ management skills would increase access to agricultural credit by 0.265 and a unit increase in collateral availability would lead to 0.654 increase in the scores of accessing agricultural credit. This indicated a significant and positive relationship between the two factors and access to agricultural credit. Regarding, the relationship between access to agricultural credit and interest rates was significant but negative. This meant that an increase in interest rates by one unit would decrease the scores of accessing agricultural credit by 0.579 while holding other factors constant.