Farm Size and Credit Repayment Capacity: Insights from Pineapple Production in Bangladesh

Abstract Credit serves as a crucial driver of agricultural growth, particularly in developing countries such as Bangladesh, where agriculture is central to the economy. This study investigates the credit usage, availability, cost, and repayment behavior of pineapple farmers in Sreemangal Upazila. Using purposive and simple random sampling, data were collected from 100 farmers across four unions, of which 57 had obtained loans. These 57 borrowers were categorized into small, medium, and large farm sizes. A simple linear regression model was employed to examine the relationship between farm size and loan repayment performance. Findings indicate a positive correlation between farm size and credit practices. As farm size increased, farmers received a higher percentage of the loan amount they applied for, while their reliance on credit for household expenditure decreased. Notably, 57 percent of the borrowed funds were used for productive agricultural purposes, while the rest was spent inefficiently. Small-scale farmers showed weaker repayment performance whereas large-scale farmers demonstrated satisfactory loan recovery, as the regression analysis confirms. The results suggest that larger farms benefit from lower effective credit costs due to scale and efficiency. However, smallholders face barriers in accessing institutional credit – particularly from the Bangladesh Krishi Bank ( BKB ) – due to complex procedures, collateral demands, and delayed disbursement. Strengthening rural financial institutions and tailoring loan services to the needs of small-scale farmers could enhance credit accessibility and repayment performance, and ultimately foster inclusive agricultural development.