Determinants of Credit Access By Small Scale Cassava Farmers in Awka North Local Government Area of Anambra State, Nigeria

Abstract

The study examined the determinant of access to credit by small scale cassava farmers in Awka North Local Government Area of Anambra State, Nigeria. Specifically, the study identified the major sources of credit among the small-scale cassava farmers; estimated the determinants of farmers’ access to formal credit; compared the income of the farmers who have access to formal credit and those who had not; and identified constraints to farmer’s access to credit. A simple random sampling method was used in the selection of 240 respondents (120 who had access to credit and 120 who did not). The data for the study was from primary source through the use of structured questionnaire designed in line with the objectives of the study. Descriptive statistics, binary logistics regression model, t-test and mean score from a three-point Likert type of scale were used to achieve the stated objectives. The result on determinants influencing credit access among cassava farmers indicated coefficients of membership of cooperative society (4.971) to significantly determine the probability of small scale cassava farmer’s access to credit at 1% while the coefficients of experience (2.134), farm size (2.772), extension contact (2.669) and distance to credit source (2.333) significantly determine the probability of small scale cassava farmer’s access to credit at 5%. The Independent t test result indicates that farmers who had access to credit had better farm income (374, 627.90) compared to their counter parts in who had no access to credit (250, 129.87) which implied a significant difference (P<0.05). The major constraints of cassava farmers in credit access from formal and informal credit institution is inadequate collateral security (2.9) and high interest rate (2.6) respectively. The study recommended among others that Financial institutions such as Agricultural and microfinance banks, should be established in the rural areas and the procedures for securing loans should also be streamlined in order to make it simple for the farmers.