Determinants of Credit Access among Smallholder Dairy Farmers in Kinangop Sub-County, Kenya

Dairy farming plays a major role in the Kenyan agricultural sector as it is dominated by smallholder farmers who contribute approximately 80 per cent of the total milk production. In Kinangop Sub County, there are many credit service providers however, not all smallholder dairy farmers have benefited from such services, instead smallholder dairy farmers have continued to experience challenges such as limited access to financial services. This study therefore analyzed the determinants of credit access among smallholder dairy farmers in Kinangop Sub-County using a binary logistic regression model. Following this, the marginal effects of the predictor variables on the likelihood of accessing credit were estimated. A total of 230 respondents were sampled from a population of 35,840 smallholder dairy farmers using both stratified and simple random sampling techniques and both structured and semi structured questionnaires were used to collect data. The study adopted descriptive survey research design. Descriptive analysis revealed that majority: 59.57% of smallholder dairy farmers were males, 69.57% were married and had a mean age of 39.4 years. The average household size was 4 members per household. Formal schooling was also attained by the respondents, majority having an average of about 8 years of schooling. On average farmers had 2 dairy cattle per household, produced 341litres of milk per month and had 11 years of farming. The binary logistic regression analysis and the marginal effect calculation revealed marital status, years of schooling, savings frequency, and dairy farming as a primary occupation, financial education, association membership and number of dairy cattle as the significant determinants of credit access. The study therefore concluded that there were significant determinants of credit access in the study area and recommended that formulating policies geared towards enhancing educational attainment of farmers would be vital in enhancing credit accessibility to farmers in the study area. There is also need for the Government and other stakeholders to encourage dairy farmers to join farmer based associations and eliminate stringent collateral barriers and bureaucracies that tend to discourage smallholder dairy farmers from accessing and participating in different credit schemes.