TY  - PRO
AU  - Owuor,G.
AU  - Friesen,D.K.|Palmer,A.F.E.
AU  - Wangia,M.
AU  - De Groote,H.
ED  - Centro Internacional de Mejoramiento de Maiz y Trigo (CIMMYT) Kenya
TI  - Impact of self-help groups credit on input use in maize production in siaya, Kenya
SN  - 970-648-120-6
PY  - 2002///
CY  - Nairobi (Kenya)
PB  - KARI|CIMMYT
KW  - Economic analysis
KW  - AGROVOC
KW  - Economic resources
KW  - Farmers associations
KW  - Food crops
KW  - Kenya
KW  - Maize
KW  - Rural areas
KW  - Seed production
KW  - CIMMYT
KW  - KARI
N2  - Maize is the major food crop in Kenya, and most of it is produced by small-scale farmers. One of the major production constraints is inadequate production credit. This study analyzes how self-help credit and saving groups can relieve that constraint. In Ukwala Division, Siaya District, 37 groups and 90 farmers were interviewed to establish the groups' credit impact on improved input use and maize production. These farmers were found to have no access to formal credit, while more than 90% of them consider credit shortage the major constraint to improved input use. About two thirds of households are member of a self-help group. These groups have an average of 19 members, 94% of them women. Members meet on average twice a month, and each one contributes on average 106 Kenya Shillings (KSh) per person per meeting, or a total of 4,000 KSh per month per group. From these contributions, 46% is set aside to meet members' loan demands, while 44% is given to members in a rotating fashion. About 46% of the loans were used for agriculture, in particular for fertilizer and seed. As a result, farmers who borrow from the groups use significantly more fertilizer than non-borrowers (19.4 vs 6.0 kg/ha) as well as more hybrid seed (4 vs 2 kg/ha), leading to higher maize yields (845 vs 616 kg/ha). However, the members' contributions are not cover the demand for credit, leading to rationing (on a first-come first-served basis) and high interest rates (14% per month). Linking formal and informal credit markets should increase the available capital and hence decrease rationing and interest rates, while preserving the strengths of informal systems, in particular concerning client information and provision of flexible services with low transaction costs. The major challenge, however, is to determine in how far external capital can be used without changing the essential features that determine the sustainability of the informal groups
ER  -