DETERMINANTS THAT AFFECT AGRICULTURAL INPUT LOAN REPAYMENT IN CASE OF CHEHA WOREDA

Abstract

Agricultural input loan is the most important source of income for small farmers to purchase agricultural input and bring changes in the economic development of farmers. Even though, the loan should be repaid according to agreement reached between borrower and lender, but the farmers’ did not repay the loan on time. This study tries to identify determinants that affect agricultural input loan repayment of farmers in Cheha Woreda. Therefore, the major concern of the study was on identifying the major socio- economic and institutional factors that affect the loan repayment capacity of farmers in the Cheha Woreda. In this study, both primary and secondary data collected. Primary data collected by structured questionnaire from the sample of 100 household by multi stage sampling technique and secondary data collected from concerned organization in the study area. Analysis of the study conducted by descriptive statistics and econometrics models. Logistic regression results shows that variable such as education level, farm size and family size, are positively and significantly affects loan repayment of farmers, while, sex, age and distance from microfinance are significantly affects loan repayment of farmers negatively. Depending up on the analysis of the study,the recommendation were to improve agricultural input loan repayment in Cheha Woreda, it is essential to enhance education and training for farmers, ensuring they effectively utilize loans. Establishing microfinance institutions closer to communities should reduce logistical barriers. Additionally, creating farmer cooperatives can help stabilize prices and improve access to resources