Socio-economic determinants of rice farmer’s loan size in Shama, Ghana

Abstract

Farm credit can stimulate the transfer of technology into agriculture and hence lead to increased crop yield. However, most often than not farmers are faced with the problem of loans received being far lower than what they applied for. The objectives of this study are therefore to: (i) analyse the size of loan applied for and received (ii) identify the constraints regarding loan obtainment and (iii) analyse the socioeconomic determinants of farmers’ loan size. A random sample of 91 rice farmers from Shama in the western region of Ghana was used for the study. A well-structured interview schedule was the main tool for data collection, while descriptive statistics and multiple regression analysis were the main analytical techniques. The farmers interviewed stressed loan availability and accessibility as major problems. The size of loan received by farmers was far lower and significantly different from the amount applied for. Empirical results from the regression analysis find the farm size, income and years of farming experience as positive and significant predictors of farm loan size