BANK CREDIT ACCESSIBILITY AND SUSTAINABILITY OF SMALLHOLDER DAIRY FARMERS IN RWANDA A CASE STUDY: NYAGATARE DISTRICT IN KARUSHUGA COOPERATIVE

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.