Analysis of the use of credit facilities by small-scale fish farmers in Kenya |
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Authors: | Kwamena K Quagrainie Charles C Ngugi Stephen Amisah |
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Institution: | (1) Department of Agricultural Economics, Purdue University, 403 West State Street, West Lafayette, IN 47907, USA;(2) Department of Fisheries and Aquatic Sciences, Moi University, P.O. Box 1125, 30100 Eldoret, Kenya;(3) Department of Fisheries and Watershed Management, Kwame Nkrumah University of Science and Technology, Kumasi, Ghana |
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Abstract: | The government of Kenya encourages aquaculture development by offering credit facilities through the government agricultural
finance institution, Agriculture Finance Corporation. Nevertheless, the level of credit use in fish farming is very low. Access
to credit is among several factors that affect farmers’ decision of whether to use particular technology or services. The
study examined factors that affected the decision of fish farmers in Kenya to utilize credit facilities in fish production
using a probit model. The analysis suggests that farmers in the Western province will have a 19% more probability of using
credit facilities for their fish farming operations than farmers from the other provinces such as the Rift Valley, Central,
and the Eastern province. The effect of tilapia sales on the probability of credit use by fish farmers is more than three
times that of catfish sales. Total pond acreage owned by fish farmers had a positive effect on credit use but the effect was
very small and negligible. The level of fish farmers’ use of credit facilities is very low, and there is probably the need
to educate farmers on credit use and for the government agricultural lending agency and other commercial agricultural lenders
to invest in this enterprise. Kenyan lending institutions have financed traditional agricultural enterprises, and with the
growing production of farmed fish, more research is needed to document the aquaculture business model to assist in assessing
the profitability potential in aquaculture. |
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