IMPACT OF AGRICULTURAL CREDIT ACCESS ON AGRICULTURAL PRODUCTIVITY AMONG MAIZE AND RICE SMALLHOLDER FARMERS IN RWANDA

Abstract

This paper assesses the impact of access to agricultural credit on the agricultural productivity of 422 smallholder farmers that cultivate maize or rice in the Western and Eastern province of Rwanda. Stratified, simple random and convenience sampling techniques were used to sample districts, sectors, cells and households. Data were collected using structured interviews and analyzed using propensity score matching techniques. Results indicated that productivity was higher by 44% among the farmers who accessed credit implying that they harvested on average an extra 440 kilograms of maize or rice. According to a crop-specific analysis, agricultural credit access had a more significant impact on maize productivity, with a difference in proportion of 68% (p = 0.000) but had no impact on rice productivity (p = 0.149). The study concludes that agricultural credit was important for Rwanda’s agricultural productivity. Thus policy measures should aim at improving smallholder farmers’ access to agricultural credit and promoting the use of modern agricultural inputs, particularly among rice farmers in Rwanda.