Analysis of the Factors Influencing Smallholder Rice Farmers’ Access to Credit in the Upper East Region of Ghana

Smallholder rice farmers in the Upper East Region of Ghana lack access to credit and this can hinder adoption of technologies introduced in the region, eventually impacting on productivity of rice which is one of the major cereals cultivated and consumed in Ghana. A total of 140 rice farmers were sampled for the study in Kassena-Nankana district in the Upper East Region using a multi-stage sampling technique. This study employed the probit model to estimate factors that influence rice farmers’ access to credit. The result of the study revealed that rice farmers invested the credit they access from formal and informal sources into non-agricultural activities which are mostly not what the credit was taken for. This implies a diversionary behaviour of farmers from what is expected. Also, majority of the farmers received cash credit below GH¢ 1000. The probit result revealed that age, marital status, membership of farmer based organisation, extension visit, record keeping and farm income were the significant variables that influenced rice farmers’ access to credit. Age and farm income negatively influenced farmers’ access to credit while marital status, member of farmer based organisation, record keeping and extension visit positively influenced farmers’ access to credit. The study recommends that rice farmers should be encouraged and sensitized to use the credit for agricultural activities in order to increase productivity. Extension agents should train rice farmers on record keeping since record keeping was seen to be a key factor that positively influenced farmers to receive credit especially from formal credit sources. Lastly, rice farmers should be encouraged to form groups, given that it also positively influenced farmers’ access to credit.