Abstract:
This study examines the determinants of smallholder farmers' access to formal credit in Ambo district. The total number of target population was 7,086 from target population In this study both primary and secondary sources of data were used for data collected. The primary data or primary data source was collected from the 153 participating farmers.
In this study both primary and secondary sources of data were used for data collected. The primary data source was collected from the participating farmers. Primary data was obtained through questionnaire and Secondary data was obtained from relevant published journal articles, books, theses, and documents. For data analysis, the researcher was employ descriptive and inferential. For data analysis, the researcher was employ descriptive and inferential statistics such as the chi-square and t-test. To create a clear image for both the reader and the researcher, descriptive statics like mean, percentage, frequency, standard deviation, tabulation, ratio and binary logit, model was utilized to summarize the data generated by research questionnaire respondents. The multi-co linearity in this study was checked using the Tolerance and VIF value. Significant mean difference was observed between formal credit users and non-users with respect to age .The result of the survey revealed that credit users and non-user farmers have an average age of 47.98 and 37.96 years respectively. The difference in terms of age among the groups was significant at 5% probability level. This indicates that farmers with higher age have better association with credit sources that could provide better information about the institutions that can facilitate access to formal credit sources
