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Determinants of Choice of Finance by Coffee Farmers in Machakos County, Kenya

P. Songa,J. Cheluget,S. Sandhya,J. Satpathy

Published 2026 in European Journal of Multidisciplinary Insights

ABSTRACT

Coffee farming in Kenya has faced numerous challenges over time ranging from land ownership to access to information, cultural beliefs and collateral challenges to acquisition of bank credit. This study aims to establish the determinants of choice of finance by coffee farmers in Machakos County Kenya. The study adopted a descriptive approach which utilized both quantitative and qualitative research methodologies. The study used questionnaires to collect data from a sample of ninety-six (96) respondents. Multiple regression analysis was undertaken to test the relationship between the independent variable (collateral, interest rates, bureaucracy and accessibility to financial institutions) and the dependent variable (choice of finance). The findings indicate that R is 0.726, R2 is 0.527 and adjusted R2 is 0.5905. ANOVA of the data showed that F calculated is greater than F critical (26.361>2.49), indicating that the overall model was reliable in predicting the relationship between the independent variable (collateral, interest rates, bureaucracy and accessibility to financial institutions) and the dependent variable (choice of finance).The study concludes that there was a statistically significant association between collateral, interest rates, bureaucracy and accessibility to financial institutions and selection of funding as the p values 0.039, 0.001, 0.015, 0.011 and 0.018 are less than 0.05 at 5% level of significance. The study recommends that government and financial institutions, as well as other lending institutions, should consider coming up with policies and procedures geared towards catering for specific credit needs of farmers.

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