Large investment cannot be made by the smallholder farmers out of their own funds because of their low level of incomes. Even though there are attempts to solve these rural financial difficulties by the government through extending rural financial institutions, a number of farmers turned out to be defaulters. When such difficulty arises, the lending institution faces a problem. In this study, primary data were collect from 130 randomly selected borrowers using semi-structured questionnaire. In addition, secondary data were collected from different organizations and pertinent publications. A two-limit tobit regression model was employed to identify factors influencing loan repayment and intensity of loan recovery among smallholder farmers. A total of 14 explanatory variables were included in the empirical model and out of these, six variables were found to be statistically significant. These are total land holding size of the family, total livestock holding, expenditure on social...