Credit Accessibility and Performance of Small Scale Farms in Rwanda: A Case of Selected Farmers in Gicumbi District

July 19, 2025

Aube Fabrice Kakiriho – University of Kigali

Osiemo Kengere Athanas – Mount Kenya University

Abstract: This study examines the effect of credit accessibility on the performance of small-scale farms in Gicumbi District. It attempted to determine effect of cost of credit on performance of small scale farms in Gicumbi District, Rwanda. A descriptive research design was employed, integrating both quantitative and qualitative methods to assess how interest rates, hidden charges, and financial literacy affect farmers’ access to credit and, consequently, their productivity. A total of 293 questionnaires were distributed across four sectors Byumba, Kageyo, Mutete, and Kinyami with 269 valid responses returned, representing a high response rate of 91.8%. Descriptive statistics, correlation, and regression analyses were conducted using SPSS Version 23. The results revealed a strong and statistically significant positive relationship between cost of credit and farm performance, with a Pearson correlation coefficient of r = 0.795 and a regression R² value of 0.649, indicating that approximately 64.9% of the variation in farm performance could be explained by cost-related factors. Farmers identified high interest rates, complex loan procedures, lack of financial literacy, and hidden bank charges as major barriers to credit accessibility. Based on these findings, the study recommends the implementation of subsidized credit schemes, farmer-focused financial literacy programs, and the simplification of loan processes to enhance credit uptake. Addressing these financial barriers is essential to improving the productivity and sustainability of smallholder farms in Rwanda.