Determinants of Demand for Credit among Farmers in the Kwabre East District of Ghana

Abstract

The Agric sector provides employment to majority of Ghanaians and hence serving as a very important sector in the Ghanaian economy. However, a vital section of the people engaged in agriculture is poor. Given this, it is suggested that these farmers are given other incentives as well as credit in order to expand their activities, which may end-up bettering their welfare. Given this, this study conveniently sampled 150 farm owners in the Kwabre East District of Ghana, in order to investigate the socio-economic factors that influence the demand for credit for their farming activities. The study employed the binary log it model. The study found that farmers with ages 31-40 years and 41-50 years were more likely to demand forced it relative to those who were 18-30 years. Also female farmers were found to be more likely to demand for credit relative to their male counterparts. Further, Muslim farmers were found to be less likely to have demanded for credit relative to their Christian counterparts. Moreover, farmers who had employees, those with senior high education and those with other assets were more likely to demand for credit. Also single/widowed/divorced/separated farmers were found to be less likely to have demanded for credit. Therefore policies towards ensuring higher demand for credit among farmers should take in to account socio-economic factors such as education, age, gender, ability to employ, having additional assets, religion and marital status.