Examining the Effect of Household Economic Factors on Access to Agricultural Financing among Small-Scale Farmers in Kenya

Access to agricultural financing remains a critical challenge for small-scale farmers globally, with household economic factors playing a pivotal role in determining credit accessibility. This study examines how household economic characteristics influence small-scale farmers’ access to agricultural financing in Kenya. Using secondary data from various sources including World Bank reports, agricultural surveys, and peer-reviewed studies, this research analyzes the relationship between household income levels, asset ownership, farm size, educational attainment, and access to formal and informal credit sources in the Kenyan context. The findings reveal that household income, collateral availability, farm size, and educational level significantly influence farmers’ ability to access agricultural credit in Kenya. The study shows that small-scale farmers face both supply-side and demand-side credit constraints, with only 36-40% having access to formal credit. Supply-side constraints include stringent collateral requirements and lengthy application processes, while demand-side factors encompass risk aversion and information asymmetries. The research recommends policy interventions focusing on financial inclusion, capacity building, and development of innovative credit products tailored to small-scale farmers’ needs in Kenya.