Evaluating demand side factors that affect institutional credit use and profitability of small-scale growers of roots and tubers: evidence from Cameroon's South West region

In this study, demand-side variables affecting the use of institutional finance with small-scale growers of roots and tubers profitability in Cameroon’s southwest are investigated. Using a multi-step stratified and straightforward random sample process, 837 respondents were chosen. In study was found that as farm size grows, so does the likelihood of loan need. A farmer with more years of farming expertise has more opportunities to use and demand finance. Credit institutions are more willing to lend to couples because they believe they will be able to repay the loans collectively. Educated farmers are certain that using borrowing to grow their investment will yield output that will cover their loan repayments due to their knowledge of production processes and record keeping. Further, the profitability of institutional credit users for cassava, cocoyam, and yam was higher than that of non-users of institutional credit. New techniques for identifying financially disadvantaged rural poor in the Region should be created by focusing on metrics that would increase the efficiency of entrepreneurs and take them closer to the production frontier. One of these solutions may be for the government to encourage microfinance institutions to lend to businesses in the form of inputs rather than cash.