Limited access to capital and credits hinders small farms from utilizing resources effectively for optimal performance. Empirical literatures argue that various factors, such as price, risk, transaction and rural financing accessibility contribute to these constraints. To understand this issue, t his study examines the impact of capital and credit constraints on Gher based prawn farms in Bangladesh , focusing on factors influencing these constraints and their effects on farm performance. We used econometric methods in analysing the primary survey data obtained from direct interview of 452 gher to estimate two key relationship. First the relationship between credit constraints and variaous socioeconomic and demographic factors, including access to information perceived farm risk as well as the marginal likelihood of being credit constrained. Second we investigated the impact of credit constraints on financial performance. For these analyses, we used to main techniques. Firstly, we employed a probit model with credit constraints as the dependent variable and various factors influencing credit constraint as independent variables. S econdly we applied propensity score matching (PSM) estimator to approximate and quantify the impact of credit constraints on the financial performance of small farms. It is found that limited access to capital, influenced by price , risk, transaction factors , and access to finance, hampers small farms’ ability to optimize resource use. Results further show that off farm work, land size, farm specialization significantly affect credit constraints. It is observed that financially constrained small farmers experience lower aggregate income from off farm activities than that of unconstrained farmers , potentially resulting difference in aggregate household income. Furthermore , this study highlighted that specific reasons for credit constraints, such as the inability to obtain agricultural loans at the required.