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Credit Constraints, Off-Farm Participation and Productivity; Case of Kenyan Rural Sector

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dc.contributor.author Njeru, Timothy Njagi
dc.contributor.author Wainaina, Priscilla
dc.contributor.author Onyango, Kevin
dc.date.issued 2017
dc.date.accessioned 2021-03-31T08:52:59Z
dc.date.available 2021-03-31T08:52:59Z
dc.identifier.uri http://41.89.96.81:8080/xmlui/handle/123456789/2374
dc.description.abstract Abstract: Credit constraint among small holder farmers still remains one of the impediments to the much needed increase in agricultural productivity in sub-Saharan Africa. Without these constraints, farmers would be able to access the required amount of inputs, when needed, and this would in turn translate to higher yields. Farmers may be credit constrained both from the demand- and supply- side. Applying the direct elicitation approach and using representative data from 6512 households in rural Kenya, we identify credit constrained farmers and assess the effect of being constrained on maize yields. Although we do not find a significant yield differences from being credit unconstrained, the effect of various variables on yields differ significantly across constrained and unconstrained farmers. In addition, there are arguments that farmers diversify their incomes sources to include off-farm activities as a means to overcome credit constraints. However, there is not enough empirical evidence particularly from sub-Saharan Africa to support this argument. Hence we assess the relationship between off-farm participation and being credit constrained. We find that indeed participating in off-farm activities- both salaried employment and self-employment reduces the likelihood of being credit constrained. Hence, policies that facilitate households’ engagement in off-farm activities- either self-employment or salaried employment will be relevant. Similarly, information plays an important for farmers in participating in off-farm activities and also in relaxing credit constraints. Therefore policies strengthening extension services among rural households as well as social networks among farmers are necessary. Key words: Credit constraint, maize yields, off-farm income, Kenya en_US
dc.description.sponsorship United States Agency for International Development (USAID). Others include Bill and Melinda Gates Foundation (BMGF), the Rockefeller Foundation, the World Bank, European Union Ford Foundation and the Food and Agriculture Organization of the United Nations (FAO). en_US
dc.language.iso en en_US
dc.publisher Tegemeo Institute en_US
dc.subject Credit Constraints, Off-Farm Participation and Productivity en_US
dc.title Credit Constraints, Off-Farm Participation and Productivity; Case of Kenyan Rural Sector en_US
dc.title.alternative Working Paper 66 en_US
dc.type Working Paper en_US


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  • Tegemeo Institute [96]
    Tegemeo Institute of Agricultural Policy and Development is a policy research institute under the Division of Research and Extension ofEgerton University. The Institute is established under Statute 23 (14-t) of the Egerton University Statutes, 2013 under the Universities Act , 2012 (No. 42 of 2012) and its Instruments.

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