Agribusiness loans advanced by Agricultural Finance Corporation (AFC) in Mount Kenya Region have high default rate of 20.33% which compares unfavourably with 10% benchmark for all types of loans in Kenya. This is a challenge since agriloans are strategic in mainstreaming livelihoods to alleviate poverty by offering occupational and professional opportunities. This study aimed at analysing effect of borrower’s socio-economic profile on agribusiness loan default rate in AFC, Mount Kenya Region. This region represents a network of 11 branches and a population of 3,002 agribusiness borrowers. Using descriptive research design a sample of 300 borrowers was drawn through systematic random sampling with a “skip” of ten. Primary data was collected using structured questionnaire and analysed via SPSS V.27. Using regression analysis, the effect of variables to predict default rate was estimated. Results of the logit regression model showed that all 5 indicators used in this objective explained 57.15% of the dependent variable; three indicators: off-farm income, multiple borrowing and borrower-lender distance were statistically significant at 5% (p-values=0.00<0.05). The study found that avoiding multiple borrowing and managing the friction of distance mitigated default. The study enlightens on effective ways of addressing default problem. Recommendations: encourage government interventionist policy of facilitating uptake of agricultural insurance and subsidizing input costs; borrowers to embrace technology, team up as farming communities to find markets and affordable inputs, uptake agricultural insurances and adhere to lending directives.

Keywords: AFC loan, Default rate, Borrower’s socio-economic profile, Repayment