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THE USE OF CREDIT IN FISH PRODUCTION IN KENYA

Kwamena Quagrainie Purdue University, USA Charles Ngugi and John Makambo Moi University, Kenya. THE USE OF CREDIT IN FISH PRODUCTION IN KENYA. Kenya Aquaculture. Small-scale and medium-scale production of tilapia ( Oreochromis niloticus ) and catfish ( Clarias gariepinus )

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THE USE OF CREDIT IN FISH PRODUCTION IN KENYA

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  1. Kwamena Quagrainie Purdue University, USA Charles Ngugi and John Makambo Moi University, Kenya THE USE OF CREDIT IN FISH PRODUCTION IN KENYA

  2. Kenya Aquaculture • Small-scale and medium-scale production of tilapia (Oreochromis niloticus) and catfish (Clarias gariepinus) • Total production about 1,000 mt/year • Farms concentrated in western & rift valley regions

  3. Background • Many farmers are literate, retired civil servants, etc. • Commercial banks providing credit services for fish farming. • Government support and favorable policies towards aquaculture.

  4. Purpose of Study • Need for investments in fish farming to move from subsistence to commercial production. • Examine attitudes to credit & factors that influence use of credit.

  5. Survey • Questionnaire solicited information on: • Demographics • General Farm operations • Fish Farm operations

  6. Results - Demographics • Responses = 131 • Males – 85% • Average age 50yrs

  7. Results - Demographics • Average # of ponds = 6 • Average acreage = 616m2

  8. Results

  9. Economic Analysis of Credit Use • Explanatory variables • Region; western=1, otherwise=0 • Age • Educational level; primary, secondary or adult=1, otherwise=0 • Total pond acreage • Value of tilapia sales in past 6 months (KSH) • Value of catfish sales in past 6 months (KSH) • Type of market outlets; multiple=1, otherwise=0 • Fulltime labor cost per day (KSH) • Simple Binary Probit Analysis • Dependent variable: Whether or not credit is used to purchase inputs

  10. Parameter Estimates

  11. Marginal Effects • How do variables affect the probability of credit use?

  12. Interpretation of Results • Farmers in the Western region have 19% higher probability to use credit than farmers from other regions. • A m3 increase in pond acreage and a KSH increase in fulltime labor cost, increase the probability of credit use by 0.02% and 0.14% respectively. • A KSH increase in tilapia and catfish sales increase the probability of credit use by 7% and 2% respectively.

  13. Implications of Results • In general, there is a low probability of credit use by fish farmers. • More education is needed about the use of credit to expand aquaculture operations and improve commercialization. • Focus should be in the Western region where there is a greater % of aquaculture operations.

  14. Acknowledgement This study was sponsored by the Aquaculture & Fisheries Collaborative Research Support Program (AquaFish CRSP) funded under USAID Grant No. EPP-A-00-06-00012-00 and by Purdue University, USA and Moi University, Kenya.

  15. THANK YOU Questions?

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