Factors Affecting Beef Farmers' Access to Agricultural Finance for Beef Cattle Pen Fattening Activities in Mutare District, Zimbabwe

Abstract

Cattle beef fattening allows cattle to improve their degree of finish prior to slaughter. Provision of agricultural finance is key to beef cattle pen-fattening production and productivity. The study was conducted to establish factors affecting beef farmers’ access to agricultural finance for beef cattle pen-fattening activities in Mutare district, Zimbabwe. A sample of 105 farmers was drawn from 120 beef cattle pen-fattening farmers. The sample size was determined by the Raosoft (calculates or generates the sample size of a research or survey) sample size calculator with the actual respondents picked using an online random integer generator. The following data collection instruments: household surveys, key informant interviews and focus group discussions were engaged to further inform the study in the review of factors affecting farmers’ access to agricultural finance. A Binary Logistic Regression model technique was employed to analyse the factors affecting access to agricultural finance. The study established that access to agricultural finance was positively influenced by the type of currency offered by financial institutions (p<0.009), the nature of the collateral requirements (p<0.082) and financial products and services offered (p<0.000). From the sampled population, the analysis has shown that only twenty-nine (27.6%) of the households accessed agricultural finance while the remaining seventy-six (72.4%) had no access. Profitability analysis was run for the beef cattle pen-fattening enterprise and the results indicated that the return per every dollar invested in beef cattle pen-fattening was $1.23 implying viability of the enterprise. Being a viable business, financial institutions therefore should improve and widen their services offered to farmers such that more farmers consider accessing finance to boost beef fattening production. The financial institutions are expected to expand their penetration into the country-side to address barriers towards financial markets participation by beef cattle farmers. On the other hand, farmers should acquire more bankable assets that can be easily accepted by financial institutions as collateral. This will increase their borrowing capacities and as such increase their production capacity. The government should strive to incorporate bottom-up extension approaches and create an enabling environment for value chain finance coordination and collaboration to facilitate beef cattle production financing as this can be a profitable climate change adaptation strategy among smallholder farmers in Mutare District. Therefore, policy aimed to accelerate agricultural development in terms of accessing finance in cattle pen-fattening could be successful if these factors revealed by this study are taken into consideration.