| Abstract: | Abstract
This study has aimed to identify rural households’ access to credit in Sebeta City
Administration. A total of 190 households, 24% of them female headed households,
were included in the study. Logistic regression was applied in order to identify
factors affecting credit accessibility to rural households. . The study result revealed
that only 15% of households included in the survey had access to formal credit
service while 60% of them had indicated that they have a need for such service.
Many of them had stated that they were reluctant to apply for credit for two main
reasons: amount of loan offered by the institutions being not sufficient for their
needs and lack of awareness about the process and procedures to apply for the
loan. The result of the survey indicates that four continuous variables, age, aging,
family size and number of livestock significantly affect access to loan availability.
Similarly, four categorical variables, namely access to extension package, sex of
the household head, ownership of irrigable land and group membership
significantly affect rural household’s access to formal credit. However, education
level, income and land size don’t have significant impact on credit access. Thus,
57.3% of the households included in the study were credit constrained households. |
