Author(s): Amenu Leta Duguma
The study identified factors influencing loan repayment capacity of smallholder farmers’ borrowers. Purposive sampling techniques were used to select 93 respondents. Binary logit model result showed that 47.1 percent of respondent were defaulters and 52.6 percent were non-defaulters. model result indicates sex, marital status, follow-up & supervision, annual income and number of livestock were significant factors to loan repayment capacity of smallholder farmers’. Therefore, follow-up & supervision, consideration for marital status, annual income and number of livestock of borrowers are need government attention and greater consideration during borrowing money in the area.