Appraisal of Vegetable Marketers’ Access to Formal and Informal Credit

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ABSTRACTAn effective credit system is essential for agricultural value chain development. It facilitates fulfillment of venture potential through access to appropriate technology. There is little information on credit accessibility among vegetable marketers and other participants in the value chain such as the input suppliers, processors, and transporters. Factors that drive participation of vegetable marketers in formal and informal credit sources were studied. A total of 480 retail vegetable marketers in major markets in Ibadan, Oyo State, Nigeria, were respondents. Primary data on socioeconomic characteristics, credit sources, and types of sources of credit were collected. Data were analyzed using descriptive statistics and logit regression. Most (83%) vegetable marketers were female and 31–40 years old (31%–67%). A minority of marketers had no formal education (38.13%) and were married (81.6%). Informal credit was accessed by 45.63% of the marketers, formal credit by 40.62%, and 13.75% had no access to any kind of credit. Marketers in the age range of 41–50 years (12.91%) had most access to formal credit; those aged 31–40 years had most access to informal credit (13.54%). Factors driving participation in formal credit were years of education, interest rate, and ease of application procedure; repayment time and ease of application influenced participation of marketers in the informal credit system. Informal credit was mostly available to marketers due to ease of application processing and repayment procedure.