University of Khartoum

Farmer Access to Formal Credit Institutions in Kassala, East Sudan: Determinants and Possible Ways Forwards

Farmer Access to Formal Credit Institutions in Kassala, East Sudan: Determinants and Possible Ways Forwards

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Title: Farmer Access to Formal Credit Institutions in Kassala, East Sudan: Determinants and Possible Ways Forwards
Author: Ebaidalla, Ebaidalla Mahjoub; Abdalla,Eltyeb Mohamdain
Abstract: Agricultural finance is regarded as a decisive factor in helping poor farmers increase production, maintain their basic necessities, adopt advanced technology and raise their incomes. Therefore, access to credit is an important tool for improving agricultural productivity, encouraging economic development and alleviating poverty. Accordingly, governments in most developing countries exert ambitious efforts to improve farmers' credit accessibility, particularly in rural areas. Like other marginal states in Sudan, the agricultural sector in Kassala plays a key role in the local economy and contributes about 90% to its total income. The agricultural sector also ensures the livelihood of about 70% of the population; most of whom live in rural areas (Central Bureau of Statistics, 2008). The potential resources, in terms of arable land, water and livestock, suggest that agriculture provides the best opportunities for the state's future economic development. Therefore, enhancing the credit services for small farmers is one of the most important actions proposed for increasing their production, reducing and even eradicating poverty, and improving their contribution to the state's economy. Accordingly, the agricultural credit market in Kassala has received considerable attention from the local and central governments. The state supports branches of In a nutshell • Kassala state has abundant agricultural resources in terms of arable land and water, which suggests that agriculture provides the best opportunities for its economic development. • Despite the availability of formal credit in Kassala, rural farmers lack adequate access to the formal agricultural credit they need; most of them obtain loans from the informal credit market. • To improve the access of small farmers to formal credit, effective policy measures should be adopted, including: increasing awareness of farmers regarding effective utilization of credit and extending financial services in rural areas.
URI: http://khartoumspace.uofk.edu/handle/123456789/18821
Date: 2015


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