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Analysis of Rural Farm Households' Access to Formal Agricultural Credit in Yola South Local Government Area, Adamawa State, Nigeria

Author

Listed:
  • Amurtiya Michael

    (Department of Agricultural Economics and Extension, Modibbo Adama University of Technology, PMB 2076, Yola, Nigeria)

  • Yuniyus Dengle Giroh

    (Department of Agricultural Economics and Extension, Modibbo Adama University of Technology, PMB 2076, Yola, Nigeria)

  • Mark Polycarp

    (Department of Agricultural Economics and Extension, Modibbo Adama University of Technology, PMB 2076, Yola, Nigeria)

  • Zubairu Emmanuel Ashindo

    (Department of Agricultural Economics and Extension, Taraba State University, Jalingo, Nigeria)

Abstract

The purpose of this study was to analyse rural farm households' access to formal agricultural credit in Yola South Local Government Area of Adamawa state, Nigeria. Descriptive and inferential statistics were used to analyse the primary data collected using structured questionnaire (from 140 rural farming households). Findings from the study have shown that, 90 % of the respondents were male, mostly educated (70 %) and married (89 %) engaging in farming as their primary livelihood activity (about 81 %) with an average farm size of 2.47 hectares. The result of the binary logit regression has shown that level of education and income do influence access to credit positively, while age and distance to access point negatively influence respondents' access to formal credit. The study further revealed that, lack of acceptable collateral / security, high interest rates, low financial literacy, and complex banking procedures were the main factors that limits the respondents' access to credit facility from formal sources. In order for farmers to have an improved access to formal credits, the formation of strong groups that are viable to provide the needed capital is encouraged, banking operations should be simplified to suite farmers' needs / convenience and financial literacy among farmers should be improved through awareness campaigns (in agricultural extension packages).

Suggested Citation

  • Amurtiya Michael & Yuniyus Dengle Giroh & Mark Polycarp & Zubairu Emmanuel Ashindo, 2018. "Analysis of Rural Farm Households' Access to Formal Agricultural Credit in Yola South Local Government Area, Adamawa State, Nigeria," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 66(4), pages 947-954.
    • Handle: RePEc:mup:actaun:actaun_2018066040947
    DOI: 10.11118/actaun201866040947
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    1. Gershon Feder & Lawrence J. Lau & Justin Y. Lin & Xiaopeng Luo, 1990. "The Relationship between Credit and Productivity in Chinese Agriculture: A Microeconomic Model of Disequilibrium," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(5), pages 1151-1157.
    2. Chaovanapoonphol, Yaovarate & Battese, George E. & Chang, Hui-Shung (Christie), 2005. "The Impact of Rural Financial Services on the Technical Efficiency of Rice Farmers in the Upper North of Thailand," 2005 Conference (49th), February 9-11, 2005, Coff's Harbour, Australia 137811, Australian Agricultural and Resource Economics Society.
    3. Ghate, P. B., 1992. "Interaction between the formal and informal financial sectors: The Asian experience," World Development, Elsevier, vol. 20(6), pages 859-872, June.
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