Relationship between Financial Institutions and Smallholder Farmers in Togo

Abstract

This study aims to establish the relation between smallholder farmers and financial institutions. According to the needs of the development for the agricultural sector and the need for financing by peasants who hold this sector in the developing countries as Togo, it is important to know its relations with the financial sector. In this paper, the idea is to return to the source of the agricultural sector which is the agriculture practiced by small farmers often qualified as "family farming" of Togo and see their relationship with the institutions which provide financial services in the country. We used primary and secondary data collection methods to obtain information on institutions likely to provide finance and/or financial services to the needy and assessed the knowledge of rural populations in Togo regarding the existence of financial institutions. The primary data were collected through a survey from over 600 smallholder farmers, while the secondary data were obtained from the Ministry of Economy and Finance. The data were analyzed using SPSS with the binomial logit regression model to examine the relationships between having information about FIs and the independent variables (the existence of an FI in the locality, education, the distance, Financial services Recourse). By using a simple rate formula, we estimated the knowledge rate of Financial Institutions (FI's). The results show a poor familiarity with the existence of financial institutions (FIs) where farmers should supply for agriculture credit. "We can't have access to something that we don't know" (African proverb). It is necessary to inform rural populations about existing financial institutions that can finance them or more overbuild some close to the rural area.