Access to finance for smallholder farmers : the case of Mbare Musika in Zimbabwe

Dhlodhlo, Vienna (2017-03)

Thesis (MDF)--Stellenbosch University, 2017.


ENGLISH SUMMARY : This study investigated access to finance for smallholder farmers in the case of Mbare Musika market in Harare, Zimbabwe. A descriptive survey research design was employed, which comprises both qualitative and quantitative approaches and is supported by a logistics regression (logit) model applied to data collected from a sample of 60 smallholder farmers who sell their produce at Mbare Musika market. The findings revealed that farming was the main source of income for the smallholder farmers who sell their produce at Mbare market. The demographic characteristics confirmed that 65 percent of the respondents were males, while 35 percent were females. The results also revealed that 71.7 percent of smallholder farmers who participated in the survey have no access to finance even though 61.7 percent of them were found to be holders of valid bank accounts. Furthermore, the current research revealed that smallholder farmers are faced with a perennial need for external finance. The results further confirmed that most smallholder farmers lacked collateral security, which is the major obstacle to sustained access to financial credit, as well as additional challenges ranging from high interest rates, low credit worthiness and unfavourable lending rates. The results of the study validated that informal lenders are the main sources of finance to smallholder farmers, despite the exorbitant interest rates ranging from 10 percent to 50 percent on borrowed funds. Finally, the study recommended that the private sector needs to become engaged in enhancing access to finance by smallholder farmers in Zimbabwe.

AFRIKAANSE OPSOMMING : Geen opsomming beskikbaar.

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