Factors influencing access to credit: A case study of smallholder farmers in the Capricorn district of South Africa

The study was pursued to ascertain factors that affect smallholder farmer’s access to credit sources in the Capricorn District Municipality of Limpopo Province, South Africa. A stratified sampling method was employed to select 250 smallholder farmers in the study area. Structured questionnaires were developed, pre-tested and used for collecting data from the sampled smallholder farmers. The logistic regression model was employed in the analysis. Factors that contributed significantly to credit access were the need for credit, attitude towards risk, distance between lender and borrower, perception on loan repayment, perception on lending procedures and total value of assets. Policy recommendations included the establishment of loans offices close to farmers and operated by officers familiar with farmers to reduce lending procedures, risks and educate them on perceptions on loan repayment.   Key words: Credit, risk, perception, smallholder farmers, logistic regression.