Abstract:
The general objective of this study was to assess the effect of bank credit accessibility on the
sustainability of smallholders’ dairy farmers in Rwanda, specifically in Karushuga
cooperative, with government support as a moderator. This study had the following
objectives, to assess the impact of bank credit accessibility on sustainability of smallholders’
dairyfarmers in Karushuga cooperative, to examine the impact of government support on the
sustainability of smallholders’ dairy farmers in Karushuga cooperative, and to establish the
moderate effect of government support in the relation of bank credit accessibility and
sustainability of smallholders’ dairy farmers in Karushuga cooperative. This Study was
supported by the Financial Intermediation Theory, Theory of Information Asymmetry and
Financial Sustainability Model. This research was census research design, and the study
population comprise 198 dairy farmers members of the Cooperative Karushuga, sampled
using simple random sampling technique. The researcher used primary data in this study. A
closed end questionnaire was utilized. Descriptive research design and correlation analysis
were utilized to assess the data and results generalized for the entire population, while
multiple regression was used to test hypotheses. To compute and analyze the data in this
study, available statistical product for service solution (SPSS 27) was used. The regression
model 1 revealed that the variables Bank credit accessibility contribute 62.6% to the
sustainability of smallholder dairy farmers. The ANOVAindicate that the overall model was
significant shown by F statistic of 62.454 and p-value calculated =.004 is less than Critical p
value =0.05 level of significant. Regression model 2 revealed that the variable government
support contribute 77.3% on sustainability of smallholder dairy farmers. Findings in ANOVA,
show that the overall model was significant asF statistic was 62.454 and p-value calculated
=.001 is less than Critical p-value =0.05 level of significant.The interaction between bank
credit accessibility and government support on sustainability was also significant
(β=0.124,p=0.003), as indicated by a significant value less than .005. The results therefore
shows that government support moderate the relationship between bank credit accessibility
and sustainability.Based on the result showed from the test of hypotheses, all hypotheses
were accepted at 5% level of significance. The study recommended smallholder dairy farmers
to emphasize on bank credit accessibility as this credit is more benefit than other loans,
financial institutions to establish fair and affordable interest rates suitable to the farmers, and
the government was recommended to increase its support in order to allow farmers to invest
within the value addition of their products.
