Factors affecting agricultural repayment among beneficiaries of the Citizens Economic Empowerment Fund

Abstract

Farm credit can stimulate the transfer of technology into agriculture and hence lead to increased crop yield, hence improving the country's food sufficiency and economic development. However, most often than not farmers are faced with the problem o f lack of cheap affordable credit. This study examined the factors affecting farmers in loan repayment in Lusaka district (A case study of farmers funded by the citizens' economic empowerment commission, CEEC.) CEEC is a government institution established by an Act of parliament. Act No. 9 of2006. The main objective of the commission is to empower the citizens of Zambia who have been marginalized or disadvantaged; one of the ways of achieving this goal has been through providing access to funds. A random sample of 30 farmers funded by C E E C from Lusaka district was used for the study. A well structured questiormaire was the main tool for data collection, while descriptive statistics and Probit model were the main analytical techniques. Empirical results from the Probit analysis found the level of Education, Disbursement period and years of Farming Experience at 95 % confidence level as significant predictors of farm loan repayment, with P values of 0.02,0.000,0.000 resp«;tively which are all less than 0.05, h&ice significant Level of education and farming experience were positively significant while disbursement period was found to be negatively significant. Most borrowers were females and were less than fifty years of age; this can be attributed to the fact that the Commission fargets the women and the youth in its Empowerment Programmes. The study recommends that the application procedure should be revised to a simpler straight forward and friendlier procedure especially to those of low literacy levels to encourage their participation. Technical specialists should be employed in project appraisal and monitoring in order to assist farmers to engage in more profitable ventures. A special repayment schedule should be established for the sector as it is unlike the sectors with business all year round. Therefore, policy aimed to accelerate agricultural development in the area could be successful if these factors and problems are taken into consideration to improve participation in agricultural credit from CEEC and indeed other finance institution