Abstract
The study focused on determinants of Agribusiness Cooperators’ access to credit in from formal sources in Abia State, Nigeria. Specifically, the study examined the socioeconomic characteristics of respondents; estimated the determinants of access to credit and ascertained the challenges associated with Agribusiness Cooperators’ borrowing from formal sources. Multistage sampling technique was adopted in sampling for location and respondents. A total of 150 respondents were sampled from list of Agribusiness Cooperators in the various communities. Data were collected using questionnaire administered on respondents using interview schedules and observation. Data were analysed using descriptive and inferential statistics such as percentages, means and the Ordinary Least Squares multiple regression model. Results indicate that Agribusiness Cooperators in the study area are predominantly young, productive and literate with average farming experience of 7 years. Findings further showed that the cooperators are predominantly males, smallholders with mean household size of 6 persons and mean income of N45,878.00 per farming season. Results of the regression model indicated that farm size, education and loan period showed expected positive signs a priori and were significant at various probability levels. Contrary to a priori expectation, experience showed a negative sign and was significant at 10% level. High interest rate, delay in loan disbursement and reluctance in repaying loans were rated the most dominant challenges to borrowing from formal sources. Based on the findings, it was recommended that cooperatives should be encouraged to organize periodic capacity building exercises for members to keep them abreast of developments vis-à-vis agribusiness investment and credit access.Keywords: loan, interest rate, loan disbursement and cooperatives
Highlights
Credit is considered as a catalyst that activates other factors of production and makes under-used capacities functional for increased production (Ijere, 1998)
The implication is that the agribusiness cooperatives in the study area are predominantly populated by young and active individuals. This result is in agreement with Idoge (2013), who found that majority of cooperative members cluster within 31-50 years age bracket in a related study in the Niger-Delta of Nigeria
Findings of the study showed that the agribusiness cooperators are predominantly young which means that they are within active labour force and should be productive
Summary
Credit is considered as a catalyst that activates other factors of production and makes under-used capacities functional for increased production (Ijere, 1998). Farm credit plays a crucial role in agricultural and rural development as it enables farmers reap economies of scale, venture into new fields of production, employ new technologies and empower them to provide utilities for a widening markets Farm credit plays this role because it bridges the capital gap that exists in agricultural production. Credit is an important instrument for improving the welfare of the poor directly through consumption smoothening that reduces their vulnerability to short term income It enhances the production capacity of the poor resource farmers through financing investment in their human and physical capital. There is no doubt that in recent times, considerable interest has been shown by agricultural economists, planners, policy makers, agribusiness managers, agriculturists, and financial institutions on the need to pay more attention to farmers in Nigeria. This deserved attention is a call from the conviction that in the short-run, Nigeria can rely on farmers to supply the bulk of the food and raw materials for our industries to feed the rapid growing population in Nigeria (Ezeh, 2003)
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