Abstract
Formal agricultural loan is an important tool in agricultural development and key to agricultural modernization. This is because this source of loans enables farmers to have access to production inputs as well as adopt modern farm technologies. For agricultural development to be achieved and sustained, agricultural loan is required especially in the rural areas where majority of the populace are engaged in agriculture. The study set out to analyse the determinants of agricultural loan access from formal sources in Cross River State central agricultural zone, Nigeria and proffer policy recommendations based on the findings. A three-stage random sampling technique was employed to get a total of 100 respondents with the use of a detailed structured questionnaire. Descriptive statistics and multiple regression model were used to analyse the data. Result of the analysis showed that socio-economic characteristics of farmers such as: age, gender, occupational status, household size, educational level, farming experience, farm size, farm income, off- farm income, and labour use by respondents determined farmers access or otherwise to loan from formal sources and result of the logit regression model showed that age, education, farm size, collateral, farm income and cooperative membership all affected access of loan from formal sources positively, while farm experience do not determine access of loan from formal sources. The following recommendations were made: farmers in the area should be encouraged by government to enhance their educational level, more farmland should also be made available to increase their farm size and cooperative society’s membership should be encouraged by government.
Highlights
Result of the analysis showed that socio-economic characteristics of farmers such as: age, gender, occupational status, household size, educational level, farming experience, farm size, farm income, off- farm income, and labour use by respondents determined farmers access or otherwise to loan from formal sources and result of the logit regression model showed that age, education, farm size, collateral, farm income and cooperative membership all affected access of loan from formal sources positively, while farm experience do not determine access of loan from formal sources
The socio-economic characteristics discussed in this paper included: age, gender, occupational status, household size, educational level, farming experience, farm size, farm income, off- farm income, and labour use by respondents
Accessibility of formal agricultural loan by farmers has been observed as one sure way of increasing agricultural output, through the improvement of efficiency and the expansion of production
Summary
Akingunola and Onayemi (2010) noted that the performance of the agricultural sector in Nigeria, as in most other developing countries is low, due largely to poor access to formal agricultural loans by farmers. In Nigeria, agriculture is not practiced in a purposeful and enterprising manner, but practiced more as a survival strategy, rather than as a business venture (Central Bank of Nigeria (CBN) (2005)). This is attributed to low-income status of farmers, because of poor access to formal loans which makes them seldom able to accumulate capital goods required for purposeful and sustainable agriculture, causing their level of capacity utilization to be Slow. It is an important tool in agricultural development and key to agricultural modernization
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