Literature review on farmers’ agricultural credit access in Ethiopia

Agriculture is one of the important sectors that contribute to the economy of a country. It contributes the largest portion of the Ethiopian Gross Domestic Product, followed by the industry and service sectors, respectively. Farmers’ access to credit is essential to increase agricultural productivity and modernize agriculture. The purpose of this study was to review the recent literature related to the access to credit of farmers in Ethiopia. The reviewed literatures were obtained from Google Scholar, Science Direct, Web of Science, FAO, and World Bank. According to reviewed literature, the variables of age, gender, education level, family size, land size, number of livestock owned, years of membership to a lending ınstitution, distance from the credit center, and income level of farmers were determined as affecting factors for farmers’ access to credit. The impact of access to credit on farm productivity was found to be positive and significant. The literature revealed that most of the farmers were credit constrained and had loan demand. If the constraints were removed and farmers could access enough credit, agricultural productivity would be increased and agricultural income would be improved. Therefore, the government has to support microfinance institutions in order to provide credit to farmers, and women empowerment should be ensured for fair credit access.Agriculture is one of the important sectors that contribute to the economy of a country. It contributes the largest portion of the Ethiopian Gross Domestic Product, followed by the industry and service sectors, respectively. Farmers’ access to credit is essential to increase agricultural productivity and modernize agriculture. The purpose of this study was to review the recent literature related to the access to credit of farmers in Ethiopia. The reviewed literatures were obtained from Google Scholar, Science Direct, Web of Science, FAO, and World Bank. According to reviewed literature, the variables of age, gender, education level, family size, land size, number of livestock owned, years of membership to a lending ınstitution, distance from the credit center, and income level of farmers were determined as affecting factors for farmers’ access to credit. The impact of access to credit on farm productivity was found to be positive and significant. The literature revealed that most of the farmers were credit constrained and had loan demand. If the constraints were removed and farmers could access enough credit, agricultural productivity would be increased and agricultural income would be improved. Therefore, the government has to support microfinance institutions in order to provide credit to farmers, and women empowerment should be ensured for fair credit access.A