DETERMINANTS OF LOAN REPAYMENT PERFORMANCE OF SMALLHOLDER FARMERS IN CASE OFCHEHA WOREDA

Abstract

The aim of this study was to analyze determinants of loan repayment performance ofsmallholder farmers in Cheha Woreda SNNPRs. As a specific objective, this study describes the barrier of farmer’s loan repayment performance and factors affecting loan repayment performance in the study area. Purposive sampling technique was used to select Cheha woreda and simple random sampling technique was used to select the sample kebele. For this study a total of 150 households were selected purposively and from these 60households were selected randomly followed by probability proportional sample from each kebele. Both primary and secondary data were collected for this study. Primary data were collected by direct interview of sample respondents; whereas, secondary data were also collected from published and unpublished documents. The data were gathered both qualitative and quantitative nature and it was analyzed by using econometric model and descriptive statistics like percentage and frequency. The smallholder farmer who do not participate in loan repayment have many constraints like:-Lack of education, inadequate extension contact and access of land. In general as these research indicates most samples smallholder farm are who are defaulter of loan are on the problem of low land holding size, small family size , inadequate extension service and their livelihood is not sufficient for their family this lower repayment capacity of the farmers and the higher the probability to be default