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Do credit constraints affect agricultural technology adoption? Evidence from Nigeria

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  • Balana, Bedru
  • Oyeyemi, Motunrayo
  • Benson, Todd

Abstract

The agricultural sector in Nigeria is characterized by low productivity that is driven in part by low use of modern agricultural technologies. Poor access to credit is seen by many observers to be one of the key barriers to adoption of these technologies. Literature suggests that credit constraints impede individuals from investing in productivity enhancing agricultural technologies and, thus, poor farmers are unable to engage in high-return agricultural activities. Much policy discourse and research literature associates agricultural credit constraints with supply-side factors, such as farmers not having access to credit sources or high costs of borrowing, and, thus, recommend that such supply-side constraints be addressed to improve smallholders’ access to credit. However, demand-side factors, such as borrower’s risk-averse behavior, financial illiteracy, collateral requirements, or perceived high transactions costs, can also play important roles in credit-rationing for smallholder farmers.

Suggested Citation

  • Balana, Bedru & Oyeyemi, Motunrayo & Benson, Todd, 2020. "Do credit constraints affect agricultural technology adoption? Evidence from Nigeria," NSSP policy notes 53, International Food Policy Research Institute (IFPRI).
    • Handle: RePEc:fpr:nssppn:53
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    Cited by:

    1. Tesfaye, Meneyahel Z. & Balana, Bedru B. & Bizimana, Jean-Claude, 2021. "Assessment of smallholder farmers’ demand for and adoption constraints to small-scale irrigation technologies: Evidence from Ethiopia," Agricultural Water Management, Elsevier, vol. 250(C).
    2. Leshan Yu & Yan Song & Haixia Wu & Hengtong Shi, 2023. "Credit Constraint, Interlinked Insurance and Credit Contract and Farmers’ Adoption of Innovative Seeds-Field Experiment of the Loess Plateau," Land, MDPI, vol. 12(2), pages 1-28, January.

    More about this item

    Keywords

    NIGERIA; WEST AFRICA; AFRICA SOUTH OF SAHARA; AFRICA; credit; agriculture; technology; smallholders; agriculture extension; agricultural technology; credit access; adoption; demand-side constraints; supply-side constraints;
    All these keywords.

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