Agriculture plays a fundamental role in Ethiopia’s economy, serving as the main source of livelihood for a large proportion of the rural population. The sector contributes significantly to employment, food supply, and income generation. Nevertheless, its overall performance remains constrained by several structural challenges, among which limited access to agricultural credit is particularly critical for smallholder farmers. This study provides a comprehensive review of existing empirical studies to explore the factors that determine farmers’ access to agricultural credit in Ethiopia and to examine its implications for farm performance. A systematic review methodology was used, drawing on evidence from peer-reviewed journal articles, institutional publications, and reports. The review identifies a range of factors that influence credit accessibility. These include socio-demographic characteristics such as gender, human capital attributes, and farming experience, as well as economic factors. In addition, institutional factors as well as physical factors play an important role in shaping farmers’ ability to obtain credit. Furthermore, the evidence consistently showed that access to agricultural credit was associated with improvements in farm productivity and household income. However, disparities in access persist, with women and resource-poor farmers facing greater barriers to financial services, thereby limiting their capacity to benefit from credit opportunities. Therefore, strengthening inclusive rural financial systems is essential for improving agricultural productivity, enhancing market integration, and supporting long-term agricultural development in Ethiopia. Furthermore, policy intervention should prioritize expanding financial service coverage, addressing structural constraints, and reinforcing institutional support systems to ensure that rural household farmers can access credit on equitable terms.
Lemma Gutema (Tue,) studied this question.