Transaction Cost Of Borrowing Among Small Scale Farmers In Rivers State, Nigeria

Abstract

The study examined transaction cost of borrowing among small scale farmers in Rivers State, Nigeria. Data was collected with the aid of structured questionnaire from 109 randomly selected small scale farmers in the study area. Data analysis was by frequency, percentage and mean. It was found that farmers mostly patronize money lenders but when the patronize formal financial institutions problems encountered include high interest rate, loan not available at right time, available loan inadequate, farmers not aware of loan facilities, inability to provide securities, non-existence of banking services and high transaction cost. Transaction costs such as interest charges, transport, feeding, money paid for processing forms and gratification may influence the willingness of the small scale farmers to borrow or not to borrow.

Global Approaches to Extension Practice Vol.1(1) 2005: 109-114