Agricultural Loan Utilisation among Beneficieries of Bank of Agriculture in Tafawa Balewa Local Government Area, Bauchi State, Nigeria

Abstract

The study examined agricultural loan utilisation among borrowers of Bank of Agriculture in Tafawa Balewa Local Government Area, Bauchi State. It had the objective analyzing agricultural loan utilisation among borrowers. Data were collected from 48 randomly selected respondents through the instrument of questionnaire and analyzed using descriptive statistics (frequencies, ratio, percentages, and statistical means), T-test, regression and correlation analyses. The results showed that beneficiaries had a 0.6:1 ratio of loan receipt to credit applied for having received an average loan amount of N107, 250, being 60.4% of the loan application. It was found out that crop production beneficiaries utilised the loan on fertiliser, labour, farm assets, storage bags, agrochemicals and seed/seedlings, while animal production beneficiaries used the loan for stocking, feed, labour, drugs and livestock equipment. Regression result on the factors affecting loan utilisation showed that educational level, farming experience, and number of supervisions were statistically significant (P<0.05), while timely loan receipt and interest rate were significant at (P<0.01). Correlation between number of supervision visits and the loan amount put to agricultural use was statistically significant (P<0.05). It was concluded that farmers made the best use of the amount of loan acquired. However, the loan volume granted to farmers was inadequate. It was therefore recommended that while more should be given in terms of loan volume to farmers, it should be followed by intense supervision as it was found to correlate positively with loan utilisation.