Determinants of Access to Credit among Rural Farmers in Oyo State, Nigeria

Abstract

This stud y examined the determinants of credit access by rural farmers in Oyo state Nigeria. Specifically the study identified the socio-economic characteristics of the rural farmers, examined the factors affecting access to credit by the rural farmers, identified constraints faced by rural farmers in credit acquisition.Data were collected with the aid of structured questionnaires, administered on 210 respondents using multistage sampling procedure. The data were analyzed with the use of descriptive statistics and logit model.The sigma values of the binomial (σ 2 = 90.32) logit mo del that measured the significance of model showed that the data fit the model reasonably well. The binomial logit model revealed that significant relationships existed between sex (-2.0187), marital status (-1.9786), lack of guarantor (2.1517), high interest rate (6.8263) and access to credit. The variables were significant at 10%. It is concluded that there is need for financial institutions to help look into the conditions for obtaining credit by farmers, so that the less privilege among them will be able to benefit from credit disbursement especially in the aspect of high interest rate, guarantor and collateral security.

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