Factors influencing access to credit facilities in Apac District

Abstract

The study focussed on factors that influence access to credit facilities in Apac District. The research was based on qualitative and quantitative methods. It employed various data collection methods that included interview schedules, on-spot observations and questionnaires. To ensure data quality control, questionnaires were edited for accuracy, adequacy, completeness and consistency; and first piloted. The study revealed that major factor that hinder credit access in Apac District were: inadequate collateral security; lack of technical, financial and managerial skills; complicated accessibility procedures; stringent loan terms; cultural biases, especially in disfavour of women; inadequate freedom to select projects to apply loan onto; low level of basic education and in adequate training in loan matters; harsh environmental factors; inflation; political insecurity and market instability. The study recommended that targeting of loan should be gender specific; microfinance finance institutions should permit creditors greater latitude in selecting the projects for which they seek to apply the finances that they receive; to promote better credit access and utilisation it is advisable to raise the number of people attaining secondary education level or above and, besides, specific training in loan access, management and utilisation should be availed. Further, the study recommended that the practice of biasing credit access only in favour of the married should be relaxed. To effectively disseminate information, microfinance credit institutions should employ as many media as possible. Credit institutions should carefully explore local scenario so as to be in position to set realistic loan terms. Also, loan procedure should be simplified as much as possible so that the less educated could find it easy to follow. Credit institutions should not only monitor a beneficiary’s repayment but should, where genuine, be prepared to assess how creditors are paying back loan so as to accordingly adjust monitoring frequency and payback schedule.