DETERMINANTS OF MICROCREDIT ACCESS AND F FARMERS’ INVESTMENT IN SMALL SCALE PERI-URBAN AGRICULTURE: A CASE STUDY OF DZORWULU VEGETABLE FARMERS

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ABSTRACT

Farmers in West Africa, especially Ghana, consider different variables prior to investment as far as farming systems are concerned. The study recognizes the vital role played by Microfinance Institutions operating in the Greater Accra Region and for that matter,  the  Accra  Metropolitan  Assembly  (AMA)  in  the  improvement  of  farmers‟ livelihoods through microcredit availability and accessibility. The purpose of this research is to examine Dzorwulu vegetable farmers‟ level of access to microcredit and its influence on farmers‟ investments decisions. A random sampling technique was used to select 152 vegetable farmers of North and South Dzorwulu. Descriptive statistics was used to describe the level of microcredit access. A probit model was used to estimate the factors influencing access to microcredit by vegetable farmers. The OLS model was employed to estimate the effect of microcredit on farmers‟ farm investment amount. Kendall‟s ranking technique was used to rank the constraints faced by vegetable farmers in microcredit accessibility. Tables, percentages and frequencies were employed to describe the socio-economic characteristics of the respondents. The probit model regression results showed that gender, source of credit, awareness and land ownership had significant influence on access to credit. The ordinary least squares regression findings also showed that awareness, access to credit and savings had a significant influence on farmers‟ farm investment. The Kendall‟s ranking technique showed that collateral requirement, late disbursement and association membership were the three  most pressing constraints militating against the vegetable farmers to access to credit.

It was also found out that, access to credit was not gender-biased. The study revealed that out of 152 respondents, 122 of them constituting 80% were aware of microcredit availability to farmers. Out of 122 farmers‟ credit application, 80 farmers constituting 65% had access. 68 farmers constituting 85% of total credit access, invested part of their credits in their farming activities. The study recommends early and timely disbursement of collateral free microcredit loans by microfinance institutions to farmers so that they can use it effectively and efficiently during the farming seasons to bring favorable results.