SENIOR RESEARCH PAPER ON FACTORS AFFECTING LOAN REPAYMENT PERFORMANCE OF SMALL HOLDER FARMER : IN CASE OF LERA TOWN AZERNAT DISTRICT, SILTE ZONE, CENTRAL ETHIOPIA

Abstract

The study was conduct on factors affecting loan repayment of farmers in lera town azernat district . The main objective of the study was to investigate loan repayment of rural farmers in the study area. The specific objective of the study was to identify socio-economic and institutional factors that affect loan repayment of rural farmers and also the source of credit for rural farmers. In order to achieve the proposed objective both primary and secondary data was used. The primary data was collected from interview, whereas secondary data was obtained from published and unpublished documents. The sampling techniques that were used in this study were simple random sampling technique to have50 respondents. After data gathered from perspective source it was analyzed using logit model. From nine explanatory variables only two variables were significantly affect loan repayment of rural farmers. Those were Number of livestock, land size, source of credit and marital status were affect loan repayment of rural farmers positively and significantly. On the other hand age and amount of loan were affecting loan repayment significantly and negatively.