Financing of Agricultural Enterprises by Microfinance Banks in Orlu Agricultural Zone of Imo State, Southeast Nigeria

This study was conducted to identify and investigate the problems and constraints encountered by Agricultural enterprises owners (i.e., loan beneficiaries) in obtaining loan from microfinance Banks in Orlu Agricultural zone in Imo State, Nigeria. A representative sample was selected through multistage sampling technique. Data were collected through the use of structured questionnaire and analyzed using descriptive statistics. A total of sixty (60) Agricultural enterprises owners who obtained loan from microfinance banks were selected for the study. The results of data analyzed showed that majority of the loan beneficiates are married, fairly experienced, illiterate, have small farm size, used family labour in their farm enterprises, middle-aged, operated at subsistence level of production and obtained loan between (N10, 000 – N 200,000). Further analysis revealed that high interest rate was one of the most pressing problem that the agricultural enterprises owners encountered in obtaining loan from microfinance banks in the area. It was recommended that less burdensome administrative procedures, review of interest rates charged on loan requested, increase in sensitization activities by stakeholders in the Agricultural sector, more effective screening, follow-up operations and mentioning operation as well as launching an initiative tagged “loan plus” specially coordinated to solve these problems and constraints of the loan beneficiaries in the area.