Exploring the constraints of accessing agricultural credit by small-scale oil palm processors : evidence from the kwaebibirem municipal assembly, eastern region, Ghana

Abstract EN

This paper presents a very interesting issue on the agrarian question in Ghana and the rest of Africa : constraints to accessing agricultural credit by small-scale oil palm processors.

such constraints may have implications for investment behaviour into small-scale agro processing activities.

two hundred and sixty four (264) small-scale oil palm processors selected randomly from 10 communities in the kwaebibirem municipality in the eastern Region, Ghana, were interviewed using structured questionnaires.

the quantitative data were further triangulated with results of in-depth interview sessions with the managers of two rural banks in the community.

it emerged from the study that most of the respondents accessed loans through informal sources with personal savings being the most popular source.

the results also showed that significant determinants of factors affecting access to credit by the processors were gender, marital status, guarantor and high interest rate.

accessibility to agricultural credit was constrained by such factors as collateral security, information on credit and literacy rate of clients.

the arguments of this paper are very important for policies seeking to solve the issue of improved access to credit by small-scale agro processors in Ghana.

the paper therefore makes a strong case for sustained education and awareness creation on credit access.

it also calls for actors to unify their efforts through cooperative associations to derive maximum benefits of collective investment of group savings, and increase their chances of accessing formal agricultural credit facilities.