Smallholder Sugarcane Farmers’ Perception of the Effect of Micro Agricultural Finance Institution of South Africa on Livelihood Outcomes in Nkomazi Local Municipality, Mpumalanga Province

This paper examined smallholder sugarcane farmers’ perception of the effect of Micro Agricultural Finance Institution of South Africa (MAFISA) on livelihood outcomes in Nkomazi local municipality of Ehlanzeni District, Mpumalanga province. A sample of 77 smallholder sugarcane farmers was selected randomly from a population of 95. A structured questionnaire was used to elicit data and analysed using Statistical Package for Social Science (SPSS) version 22. The results show that constraints faced by smallholder sugarcane farmers were high level of land scarcity, low level of being exposed to drought. higher level of poor producer prices, lower rate of lack of access to formal markets, lower level of incident on crop diseases, low level of lack water supply, low level of lack of financial assistance, moderate level of farmers’ lack of incentives or motivation, low level of lack of access to available information, high level of lack of input resources, low level of lack of infrastructure, high level of input cost. Significant determinants of net income were age (t = -3.497, p < 0.10); marital status (t = -3.273, p < 0.10); type of training (t = - 3.433, p < 0.10); farm expenses (t = 4.895, p < 0.01); loan for farming purposes (t = -2.959, p < 0.10) and frequency of meeting with extension personnel (t = 2.079, p < 0.05). Gender, marital status, MAFISA awareness, non-farming activities and adequate farm infrastructure significantly affect the perception of smallholder sugarcane farmers on the effect of MAFISA financial support services on livelihood outcomes. DOI: 10.5901/mjss.2014.v5n27p103