Analysis of Factors Influencing Access to Formal Loan Among Small-scale Swamp Rice Farmers in Obubra Local Government Area, Cross River State, Nigeria

Kuye Olufemi Oludayo,Ogiri Oyom Mbina

doi:10.11648/j.ijae.20190406.19

Abstract

This study analyzed the factors influencing access to formal agricultural loan among small-scale swamp rice farmers in Obubra Local Government Area in Cross River State, Nigeria. Data were obtained from 120 respondents by using multi-stage random sampling technique. Descriptive statistics and logit regression model were used to analyze the data. The results showed that majority (62.5%) of the farmers were males, about 40% were aged between 31-40 years, married (68.33%), had household size of 7-9 persons (51.67%), had secondary education (51.67%), had farm sizes of 1-2ha (50.83%), had farming experiences of 11-20 years (45%) and only 30.83% had annual farm income of between N51,000.00 and N100,000.00. The logit regression analysis revealed that gender, farm income, household size, education and collateral positively influenced the probability of farmers’ access to loan at 1% significant level respectively. Marital status, farming experience and farm size positively influenced access to loan at 5%, 5% and 10% respectively The major constraints respondents faced in accessing loan are long period of processing loan applications, problem of getting collateral and high interest rate while the major constraints they faced in rice production are crop destruction by cattle, low yield as a result of pests and diseases and low yield as a result of poor soil. The Federal Government should enact law that will motivate the cattle herders to compensate any farmer whose crops have been destroyed or eaten by their cattle and banks should process loan applications on time so that the loan will be disbursed to farmers at the appropriate time.

Highlights

One of the major problems confronting small and mediumscale farmers in Nigeria is poor access to cheap, affordable and adequate credit
The socio-economic and demographic profiles of the respondents presented in Table 1 indicate that most of the swamp rice farmers (62.5%) were males, 40% were aged between 31 and 40 years and 68% were married
Because majority were married with large household size and low annual income they need to gain access to adequate loan facility

Summary

Introduction

One of the major problems confronting small and mediumscale farmers in Nigeria is poor access to cheap, affordable and adequate credit. In Nigeria, the small-scale farmers produce the bulk of the domestic agricultural output Adeyonu, Ajiboye, Isitor and Faseyi [1]. Availability of adequate and timely credit help in expanding the scope of operation and adoption of new technologies, enhance the purchase and use of improved inputs and facilitate other up-stream and down-stream operations in agriculture [3]. The development process of the agricultural sector can be enhanced by the ease with which credit is obtained by farmers. Credit provides a means of transfer of assets and wealth or allows him access to the use of these [4]

Methods

Results

Conclusion