Does credit access matter for household livelihood diversification in Ethiopia?

Abstract

This study examines the effect of credit access on both agricultural and off-farm activities based on a household survey of 371 rural farmer respondents in Ethiopia.it was analyzed using a logistic regression model and statistical description. Findings demonstrated that the demographic factors; gender, age, level of education, and family size have a positive and significant effect on credit access. Agricultural credit access is impacted by each of the demographic variables as independent variables. On the other hand, the result indicated that the relationship between credit access and non-farm economic activities has a negative relationship. Credit access has a significant effect on agricultural intensification and specialization rather than diversification. Therefore, a comprehensive policy and strategy needs for credit access in both the agricultural and non-agricultural sectors. The Ethiopian government should follow the integration policy between both sectors and participate in livelihood diversification strategies and achieve sustainable development goals by 2030 at large.