Financing Mechanisms for Agricultural Activities and Strategies for Repaying Agricultural Loans in the Couffo Department in Southern Benin
Abstract
Agricultural finance is a key driver of economic growth and global food security, but it continues to face a perception of high risk due to climate vulnerability and market instability. The objective of this research is to examine the financing mechanisms for agricultural activities and the repayment strategies for agricultural loans in the Couffo Department. The methodological approach is based on a literature review and surveys of 215 individuals. Data analysis was conducted using SPSS 17.0 and ArcGIS 10.8 software. The results show that agricultural producers in the Couffo department have access to a variety of microfinance institutions for credit, with certain institutions clearly dominating the market. PEBCo-BETHESDA stands out significantly, serving 39.5% of the beneficiary farmers, reflecting its strong local presence, its ability to mobilize farmers, and its more flexible credit terms that are better adapted to agricultural realities. It is followed by PADME, with 29.0% of beneficiaries, and then by CLCAM at 24.8%. Within village savings groups and mutual aid societies, farmers organize themselves into cooperatives to build collective savings, which then enable them to access internal loans tailored to their needs. Access to credit in the Couffo department varies considerably, ranging from rigorous screening in formal institutions to immediate availability within informal networks. Furthermore, the loan repayment rate has fallen by 15.91% in the Couffo department. To meet their financial obligations, 81% of the producers surveyed sacrifice their personal assets—particularly livestock or household goods—to preserve their financial reputation, even though this compromises their future productive capacity. Furthermore, 19% turn to non-agricultural activities such as food processing, small-scale retail, or motorcycle taxi services to generate the necessary cash flow.