American Research Journal of Business and Management ISSN-2379-1047 Volume 3, Issue 1, 17 Pages Research Article Open Access Determinants of Demand for Credit among Wheat and Teff Smallholder Farmers in Central of Ethiopia (Arsi and South West Shewa) Efa Gobena Tura*, Tadesse Kenea1 and Tura Kaso2 2 1 Department of Agribusiness and
[email protected] Chain Management, Ambo University, Ambo, Ethiopia Division of Logistics, Department of Energy and Technology, Swedish University of Agricultural Sciences Abstract:Received Date: November 18, 2016 Accepted Date: November 30, 2016 Published Date: June 12, 2017 The greatest challenge to food security is low productivity emanating from slow growth in the agricultural sector and one of the reasons for this is little or no access to financial resources by producers. This paper assesses the determinants of farmer’s credit demand among wheat and teff farmers in Central parts of Ethiopia. We pay particular attention to identifying credit demanded by smallholder farmers. The qualitative and quantitative types of data were collected from primary sources of data randomly from 150 teff growers. Multiple regression models were used to analysis the determinate of demand for credit by small holder’s farmers. The impacts of household characteristics on credit demand, we estimate a multiple regression model.There is no uniform access to formal credit across rural communes in Ethiopia, although quantitative rationing does exist. The results showed that demand for credit by teff smallholders are affected positively by education status, dependency ratio, low interest rate, farm size and long payment period, while the sources of loan if it is business partner affected the amount of credit demanded by teff farmers negatively.