Agricultural credit and farm productivity in Bichi local Government, Kano State, Nigeria
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Date
2016-09
Authors
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Publisher
Kampala International University, College of Economics & Management
Abstract
This study set out to investigate the impact of agricultural credit on farm productivity for export
in Bichi Local Government, Kano State, Nigeria. The study was guided by the following
objectives: i) to determine the level of farm productivity in Bichi local government, Kano State,
Nigeria, ii) to find out the common challenges faced by the local farmers in accessing
agricultural credit from commercial banks in Bichi local government, and iii) to assess the effect
of agricultural credit on the level of farm productivity in Bichi local government. The study used
a sample size of 359 respondents. OLS regression was used to determine the effect of
agricultural credit on farm productivity. The study revealed a high level of farm productivity
with a yield as high as 60,000kg per 20 hectares of land. In addition to that, the study revealed a
significant effect of agricultural credit on farm productivity (purpose of loan; r0.668**, p<O.O5;
loan amount, r=0.648, p<O.OS). Furthermore, the most common challenges that affected loan
access included among others, lack of collateral, high interest rate, complex bank systems and
late approval. The study concluded that loan purpose and loan size contribute a significant effect
on farm productivity. This is because using a right amount of loan for buying improved seeds,
fertilizers, crop chemicals or irrigation contributed a great deal to the level of farm productivity.
However, access to agricultural credit has often not been easy given the lack of collateral among
farmers, high interest rate, complex bank system and late loan approval among others. This has
often limited farmers to potentially be able to expand their production/productivity. The study
recommended that in order to get maximum output, polices of commercial banks should be
flexible and rate of interest should be less for small farmers than large farmers because small
farmers hardly acknowledge their basic need. Similarly, efforts should be made to simplify the
borrowing procedure in the terms of time-lag, acceptance of security, documentation and
disbursement of loan
Description
A thesis submitted to the college of Economics and Management in partial fulfillment of the requirements for the Award of the Degree of Masters of Arts in Economics of Kampala International University
Keywords
Farm productivity, Credit, Agricultulture