Determinants of Credit Demanded by Farmers in Mozambique

This study aims to assess the factors influencing credit demanded by smallholder farmers from microfinance institutions in Boane District of Mozambique. Data were collected with the aid of structured questionnaires, administered to 203 farmers that are benefited by microfinance institutions using systematic random sampling procedure. The data were analyzed with the use of descriptive statistics, multiple regression analysis, t test, and ANOVA. The study observed that education level, farm size, and experience in credit use from microfinance institutions were significant factors affecting amount of credit demanded by the smallholder farmers in the study area. There was no significant difference in amount of credit demanded by farmers with different gender; however, there was significant difference in amount of credit demanded by farmers with different age, marital status, number of household members, and education level. The lack of collateral security, the lack of access full amount of loan applied, and high interest rate are the major constraints faced by the farmers in the credit acquisition process.