EFFECT OF ACCESS TO CREDIT ON THE OUTPUT OF CROP-BASED FARM HOUSEHOLDS IN NIGERIA

AFOLABI, ABIODUN OLAWALE (2022) EFFECT OF ACCESS TO CREDIT ON THE OUTPUT OF CROP-BASED FARM HOUSEHOLDS IN NIGERIA. Masters thesis, Landmark University, Omu Aran, Kwara State.

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Abstract

Through the years, the issue of agricultural credit and it access by farmers has become critical in the aim of society to ensure food security, increase Gross domestic product (GDP) and improve agricultural output. However, evidence concerning agricultural credit and economic growth showed that small crop farmers had limited to no access to agricultural credit in Nigeria, thereby affecting agricultural output.The objectives of this study were to; identify the dominants sources of credit employed by crop farm households; determine the effect of socio-demographic variables on access to credit and determine the effects of credit on the aggregate crop output The research employed secondary quantitative research methodology. Data collection was from the Nigeria Living Standard Survey (NLSS) 2018/2019 data set. This study employed nationally representative data to provide pertinent information that can be of policy relevance across geopolitical zones of the country The objectives were analysed with descriptive statistics, linear regression and probit regression. The study findings revealed that friends and family were dominant source of credit to crop farmers. Also findings showed that commercial banks have the low credit disbursement for farmer. The age of the household head, sex and the size were all positively significant (1%) in determining the level of crop output across the six geopolitical zones of the study area. Furthermore, findings revealed that the determinants of credit access among crop farmers are: larger household size, married farmers, farmers with little or no education have access to credit and female household head are more credit worthy than their male counterparts. The study concluded that about 33% of sample crop farmers have access to credit. This study also shows that larger household will likely produce more crop output compared to the smaller household. The study recommends that Government should put older farmers at the forefront when making policies. Also, due to credit worthiness, female crop farmers should be sensitized and encouraged to apply for credit and crop farmers should be encouraged to create credit and thrift cooperative to access cheaper finance.

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