Abstract

Issues surrounding credit use in developing countries have come to the forefront because of market globalization and the consequent need for farms to be competitive.

This study, conducted among 180 limited-resource, crop-based, commercial-oriented farm households in Trinidad, investigated the variables associated with the decision to use credit or not. Canonical Variate Analysis was used to test differences between group means, as well as to identify the main differentiating variables. Results showed that overall farm performance, some human capital variables (farm experience and education), along with several psychological variables (attitude toward risk, adventurism and fear of the future), and resource- base variables (capital base, entrepreneurial and managerial abilities) were the more important variables that explained differences in households' decision to use credit or not.

Based on the variables identified, profiles of credit users and non users were developed. The importance of the findings for policy and program development was discussed.

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