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Determinants of agricultural loan repayments: the case of MAFISA funded farmers in uMkanyakude, KwaZulu-Natal province, South Africa

The Micro Agricultural Financial Institutions of South Africa (MAFISA) was established by the South African government in 2005 to provide production loans to smallholder farmers in all nine provinces of South Africa. This study examined the socio-economic and loan factors that influence loan repayme...

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Main Author: Ramashia, Nkhangweleni
Other Authors: Alhassan, Abdul Latif
Format: Thesis
Language:English
Published: Graduate School of Business (GSB) 2019
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access_status_str Open Access
author Ramashia, Nkhangweleni
author2 Alhassan, Abdul Latif
author_browse Alhassan, Abdul Latif
Ramashia, Nkhangweleni
author_facet Alhassan, Abdul Latif
Ramashia, Nkhangweleni
author_sort Ramashia, Nkhangweleni
collection Thesis
description The Micro Agricultural Financial Institutions of South Africa (MAFISA) was established by the South African government in 2005 to provide production loans to smallholder farmers in all nine provinces of South Africa. This study examined the socio-economic and loan factors that influence loan repayment of MAFISA-funded farmers in umKanyakude district municipality. Using data from 191 selected loans granted by Peulwana Agricultural Financial Services (PAFS), the study employed a logit model to identify the explanatory for loan default. The study found that age, gender and education were not significant in determining loan repayment. On the other hand, land size, loan cycle and loan amount were significant in influencing loan repayment. The results of the empirical analysis have three main policy implications for the government and the microfinance institutions. Firstly, smallholder farmers should be supported to increase their ownership of land size so that they can plant more crops and increase their sales. This will enable them to improve their repayment rate. Secondly, smallholder farmers should be provided with smaller loan amounts at first as it leads to good repayment. Thirdly microfinance institutions should provide more loans to lenders on a second or more cycle as this leads to good repayment.
format Thesis
id oai:open.uct.ac.za:11427/30475
institution University of Cape Town (South Africa)
language eng
last_indexed 2026-06-10T12:32:58.612Z
license_str Not specified — see source repository
provenance_str_mv Harvested via OAI-PMH from UCTD — University of Cape Town Open Access Repository
publishDate 2019
publishDateRange 2019
publishDateSort 2019
publisher Graduate School of Business (GSB)
publisherStr Graduate School of Business (GSB)
record_format dspace
source_str UCTD — University of Cape Town Open Access Repository
spelling oai:open.uct.ac.za:11427/30475 Determinants of agricultural loan repayments: the case of MAFISA funded farmers in uMkanyakude, KwaZulu-Natal province, South Africa Ramashia, Nkhangweleni Alhassan, Abdul Latif The Micro Agricultural Financial Institutions of South Africa (MAFISA) was established by the South African government in 2005 to provide production loans to smallholder farmers in all nine provinces of South Africa. This study examined the socio-economic and loan factors that influence loan repayment of MAFISA-funded farmers in umKanyakude district municipality. Using data from 191 selected loans granted by Peulwana Agricultural Financial Services (PAFS), the study employed a logit model to identify the explanatory for loan default. The study found that age, gender and education were not significant in determining loan repayment. On the other hand, land size, loan cycle and loan amount were significant in influencing loan repayment. The results of the empirical analysis have three main policy implications for the government and the microfinance institutions. Firstly, smallholder farmers should be supported to increase their ownership of land size so that they can plant more crops and increase their sales. This will enable them to improve their repayment rate. Secondly, smallholder farmers should be provided with smaller loan amounts at first as it leads to good repayment. Thirdly microfinance institutions should provide more loans to lenders on a second or more cycle as this leads to good repayment. 2019-08-16T09:43:35Z 2019-08-16T09:43:35Z 2019 2019-08-16T09:38:30Z Master Thesis Masters MCom (Development Finance) http://hdl.handle.net/11427/30475 eng application/pdf Graduate School of Business (GSB) Faculty of Commerce
spellingShingle Ramashia, Nkhangweleni
Determinants of agricultural loan repayments: the case of MAFISA funded farmers in uMkanyakude, KwaZulu-Natal province, South Africa
thesis_degree_str Master's
title Determinants of agricultural loan repayments: the case of MAFISA funded farmers in uMkanyakude, KwaZulu-Natal province, South Africa
title_full Determinants of agricultural loan repayments: the case of MAFISA funded farmers in uMkanyakude, KwaZulu-Natal province, South Africa
title_fullStr Determinants of agricultural loan repayments: the case of MAFISA funded farmers in uMkanyakude, KwaZulu-Natal province, South Africa
title_full_unstemmed Determinants of agricultural loan repayments: the case of MAFISA funded farmers in uMkanyakude, KwaZulu-Natal province, South Africa
title_short Determinants of agricultural loan repayments: the case of MAFISA funded farmers in uMkanyakude, KwaZulu-Natal province, South Africa
title_sort determinants of agricultural loan repayments the case of mafisa funded farmers in umkanyakude kwazulu natal province south africa
url http://hdl.handle.net/11427/30475
work_keys_str_mv AT ramashiankhangweleni determinantsofagriculturalloanrepaymentsthecaseofmafisafundedfarmersinumkanyakudekwazulunatalprovincesouthafrica

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