Analysis of factors influencing microfinance credit uptake among smallholder coffee farmers in Tharaka Nithi county, Kenya

Abstract

Microfinance institutions play a critical role in improving production and productivity of smallholder farmers
by availing necessary financial resources when needed. Despite the benefits of microfinance credit on
production, its uptake and use in the study region is still low. Consequently, it’s not known what factors
influence the uptake and use of microfinance credit among smallholder coffee farmers in Tharaka Nithi
county. The objective of this study was to find out the factors that influence the uptake of micro finance
credit among smallholder farmers in Tharaka Nithi County. A total of 390 smallholder coffee farmers were
selected through multi-stage sampling procedure. Primary data was collected by the use of structured
questionnaires. Both descriptive and probit regression methods were used to analyze data. Results
indicated that coffee farming experience, gender of the household head, number of coffee trees and access
to extension services had significant influence on the uptake of microfinance credit. In conclusion any
agricultural policy intervention on financing smallholder coffee farmers should focus on these factors to
enhance uptake and efficiency in management.