ABSTRACT

Agriculture is the largest sector in Somalia's economy. To determine the extent of small-scale farmers' access to credit in Somalia, and the types of informal credit they use, survey research was conducted by members of the Faculty of Economics, Somali National University in 1986. In Somalia, the cost of irrigating farm land is a heavy burden for farmers. Use of modern agricultural inputs is limited in Somalia, but there are also differences in usage by large-scale and small-scale farmers. Farmers in Somalia require loans for long-term capital investment and for seasonal inputs to increase agricultural production and productivity. While large-scale farmers may find it easier to go to the bank for their credit needs in Somalia, small-scale farmers usually approach the local shopkeeper for small loans. The formal credit institutions and programs often require farmers to have title not only to land, but also to irrigated land, in order to obtain loans.