Factors affecting loan acquisition among small scale farmers in Otukpo Local Government Area of Benue State, Nigeria

Abstract

This study investigated the factors affecting loan acquisition among farmers in Otukpo LGA of Benue State of Nigeria. Primary data collected directly from the farmers were utilised in this study and analysed using descriptive statistics and probit analysis. The findings indicate that the loan collected during the 2006/2007 farming season was significantly lower (1000 times lower) that the amount of money spent on family obligations. This brings to the front burner the issue of food security and income stability of the small scale farmers. It has been discovered that many small scale farmers tend to sell off their farm produce when prices are low in order to repay social-obligated loans and also meet up some social obligations. Among the explanatory variables, interest rate charged and collateral given positively influenced loan acquisition while response to loan conditions impacted negatively on it. This findings indicates that farmers are favourable disposed towards taken loan with interest and given of collateral and this is contrary to what many researchers have tended to postulate.

Publication
10th Annual Conference of the Nigerian Association of Agricultural Economists, 750 Seater Lecture Theatre, University of Abuja Permanent Site (Opposite Nmandi Azikiwe International Airport), Abuja, October 7th–10th
Rational credit delivery credit utilisation social-obligated loans senior claims
Job Nmadu
Professor of Agricultural Economics and Dean, School of Agriculture and Agricultural Technology

Research interests are economic efficiencies of small scale farming and welfare effects of agricultural interventions.

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