The Impact Of Microfinance On Smallholder Agricultural Productivity In Sierra Leone

Agriculture contributes significantly to the economy of Sierra Leone making it the most vibrant sector employing about 75%of the population in the country with majority settling in rural areas.The rural sector of the country is blessed with productive arable parcels of land suitable for agriculture in which majority of its participants are smallholder farmers predominantly involved in small-scale farming.These farmers lack the financial wherewithal to graduate their agricultural practices from subsistence to commercial,with the aim of increasing household incomes.The only area they have relied on to augment their financial needs andfarm productivity is on microfinance,an activity that has contributed greatly to the improvement of the socio-economic condition of smallholder farmers in the country.This research discloses the impact of microfinance on smallholder agricultural productivity in Koinadugu district in Sierra Leone.Rice,the leading produce produced by farmers in the district,is used to represent agricultural productivity.A total sample size of 100 farmers was collected from the frame out of which 50 farmers were selected from each ofthetwo groups-clients and non-clients through a random and purposive sampling techniques.Analyses of the collected data was done through descriptive statistics,Independent Samples T-Test,Cross-tabulations and Chi-Square test of significance and multiple regression analysis.A multiple regression model was employed to measure the determinant factors of rice output in the analysis.The study found that even though clients of microfinance realized high agricultural productivity comparative to the non-clients,the rural financial institutions which heavily rely on depositor's money,did not provide exclusive loans for agriculture,the utilization of other loan portfolios makes it difficult for farmers to secure long-term loans,forcing them to engage into petty trading as an income diversification strategy to pay their loans on time.Major challenges such high interest rates,inadequate information about agricultural loans,delay in loan disbursement were unearthed by the study.In future,farmers will be constrained by short-term loans if the government does not capitalize these financial institutions for exclusive agricultural lending.