Investigation Of Challenges Facing Accessibility Of Credit From Commercial Banks For Financing Agricultural Sectors In Kenya: (A Survey Of Commercial Banks In Nyeri County)

ABSTRACT

Accessibility of credit is vital for the development of any sector in the country. There has been a big challenge in the country in financing the agricultural sector. The research study aims at analysing the various challenges facing accessibility of credit from Commercial banks for financing agricultural sectors in Kenya. The study was carried out in the various Commercial banks in Nyeri County. Kenya has a total of forty three commercial banks. Out of this, Nyeri County has a total of eleven commercial banks with a total of twenty five branches. The research adopted a descriptive survey approach where staffs working in the banks represented in Nyeri County were sampled. As at 31st December 2012, the twenty five branches of the eleven commercial banks represented in Nyeri County had a total population of three hundred and seventy five (375) employees. Out of this, the survey targeted the staffs who are involved in credit processes in their respective institutions. These staffs include branch managers, Credit managers, Operations managers and credit officers. The 11 commercial banks had 25 branch managers, 20 Operations managers, 17 Credit manager and 94 credit officers. The study therefore had a target population of one hundred and fifty six (156) banks staffs. Out of these, 30% were sampled making a sample of 47 employees. Sampling was done using stratified random sampling technique. The research used primary data which was collected through the questionnaires. The questionnaires had both closed and open ended questions and were administered through the employees of the various commercial banks using drop and later pick method. Data collected was both qualitative and quantitative. Quantitative data was analyzed using the descriptive statistics of mean, mode and median. Data has been presented using tables, graphs and charts. Qualitative data has been analyzed using content analysis. The response rate was 85.1% where out of the issued 47 questionnaires 40 were returned and considered adequate to commence the analysis. The findings established that customer related challenges, agricultural activity related challenges, loan related challenges and borrowing costs related challenges influences the accessibility of credit from commercial banks for financing the agricultural sectors in Kenya. It was recommended that Commercial banks in Kenya should come up with more flexible and customer friendly solutions to enable easier access of credit to the Agricultural sectors in Kenya.