THE INFLUENCE OF ACCESS TO CREDIT ON SMALL SCALE COFFEE PRODUCTION IN KANGUNDO SUB-COUNTY, MACHAKOS COUNTY, KENYA
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Date
2019-11-01Author
Kaula, Francis Mutethya
Arasa, Robert
Nzioki, Susan
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Show full item recordAbstract
Despite many government interventions aimed at reviving the declining coffee industry in
Kenya, the quality and quantity of Kenyan coffee is deteriorating. Research has shown that
farmers are not applying production inputs due to lack of capital. The study reported in this
paper adopted a descriptive survey design and was carried out with an aim of determining how
access to credit influences small scale coffee production in Kangundo Sub-county. The study
randomly sampled 2 factories in each of the 6 societies and included 370 farmers who were
randomly selected. A validated and vetted questionnaire was administered to selected farmers.
The results show that: less than half (42.0%) of farmers do not have collateral to secure loans;
almost a third (31.1%) of farmers cannot get a guarantor to secure a loan; majority (69.2%) of
the farmers cited interests charged on loans are quite high; and majority (43.3%) of farmers
indicated that they do not have a solid financial relationship with lenders. The paper recommends that the national and county government should consider coming up with a
preferential coffee credit facility with features such as: a grace period of 12 months; preferential
low interest rates; and with government guaranteeing each loan taken. The study recommends
that future studies should explore on other variables such as climate change, land succession,
age and gender.