University of Zimbabwe Institutional Repository

Determinants of loan default in agro-based credit schemes in the tobacco industry of Zimbabwe

Show simple item record Dzingai, Tafadzwa Reggis 2017-03-30T07:51:37Z 2017-03-30T07:51:37Z 2017-03
dc.identifier.citation Dzingai, T. R. (2014). Determinants of loan default in agro-based credit schemes in the tobacco industry of Zimbabwe (Unpublished Masters thesis). University of Zimbabwe. en_US
dc.description.abstract The tobacco industry is a major driver of Zimbabwe‟s economic growth. It is currently on the rebounds after years of massive collapse. The scarcity of credit on the financial markets has seen the reintroduction of contract farming in the sector. However, this noble arrangement is being threatened by the high levels of loan repayment default. This study used a binary logistic regression model to analyse the major determinants of loan default in agro-based credit scheme in Zimbabwe‟s Tobacco Industry. Low Crop yield, poor quality tobacco, low market prices, poor loan supervision, time spent by farmer on farming activities, affiliation to farmer association and agro ecological differences were found to be key determinants of loan default among tobacco farmers in Zimbabwe. Data for the study was collected through two structured questionnaires. One was administered to 138 tobacco contracted farmers while the other one was given to 16 contracting firms‟ extension officers. Stratified random sampling was used to select the farmers‟ sample and purposive sampling was used for the extension officers. The study recommends that policies to address default should focus on the empowerment of the farmers with the skills rather than the know how alone. It was also found out that persuasive measures were more effective than threat related measures and contracting firms should aim to be as transparent as possible, while improving their communication with farmers. Group lending was found to be inappropriate until the farming community adopts relatively high levels of entrepreneurship and professionalism in addition to the development of a specific legal framework. Government should consider supporting contract farming by either addressing farmers‟ social issues or providing incentives to the contractors. en_US
dc.language.iso en_ZW en_US
dc.subject Loan repayment default en_US
dc.subject Agro-based credit scheme en_US
dc.subject Binary logistic regression model en_US
dc.title Determinants of loan default in agro-based credit schemes in the tobacco industry of Zimbabwe en_US
dc.contributor.registrationnumber R015806K en_US Bhunu, Claver Pedzisai Zimbabwe en_US Graduate School of Management en_US Faculty of Commerce en_US University of Zimbabwe en_US MSc en_US Master of Business Administration en_US Thesis en_US 2014

Files in this item

This item appears in the following Collection(s)

Show simple item record

Search UZeScholar


My Account