Who are drop-out clients? A multi-year assessment of smallholder Farmers' Investment and repayment Behaviors in a microcredit program in Western Kenya

Microcredit programs in Africa are promoted as instruments for alleviating rural poverty by enabling smallholder farmers to access agricultural input loans. However, long-term participation dynamics and factors associated with client drop-out remain underexamined, particularly in contexts marked by socio-economic and structural inequalities. This study analyzes two years of portfolio data from approximately 20,000 smallholder farmers in Western Kenya. We integrate socio-economic variables (gender, mobile phone ownership, household bereavement), institutional characteristics (group leader performance, loan officer attributes, supervision intensity), and field-level vegetation indicators derived from remote sensing, alongside exploratory machine learning techniques. Results indicate that 63% of farmers participated for only one year, highlighting challenges in sustaining engagement. Gender and mobile phone ownership were strongly associated with continued participation and higher repayment rates ( p < 0.001). Bereaved households ( n = 228) exhibited repayment rates exceeding 90% over two years, with 40% continuing participation. Peer effects were most pronounced in low-to-moderate performing groups, and female loan officers were associated with higher repayment outcomes ( p < 0.001). Repeat participants also displayed slightly higher maize vegetation indices than drop-outs, suggesting that environmental productivity conditions correspond with participation status. By jointly analyzing socio-economic, institutional, and environmental factors, this study advances understanding of microcredit continuity in rural Africa. The findings highlight both opportunities and structural constraints within agricultural microcredit programs and offer evidence relevant to policy and programme design.