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Analysis of Rural Farming Households’ Access to Credit in Kwara State Nigeria

KB Olatinwo
A Muhammad-Lawal
S Ayojide


Agricultural credit has been identified as an important component in the development of the agricultural sector in Nigeria. Though, agricultural credit has the potentials of improved capital formation, increased resource productivity and diversified agriculture among the rural farming households, inadequate access to agricultural credit is among major  factors responsible for the decline in the contribution of agriculture to Nigerian economy. This study therefore examined various sources of credit available to the famers in Kwara state, Nigeria. It also analyzed the determinants of access to agricultural credit among the farming households. A two-stage random sampling technique was used to select a sample of 90 farming households as respondents. The respondents were interviewed with the aid of well structured questionnaire. The data obtained were analyzed using descriptive statistics and Ordinary Least Square regression analysis. The study showed that co-operative societies, personal savings and rotary loan scheme ‘esusu’ were the regularly accessible sources of credit. The study also showed that interest rate, type of agricultural enterprise and size of farm had significant relationship with the farmers’ access to credit. Lack of collateral security was also identified as a major problem faced by farmers in accessing loans. It is therefore recommended that the formation of co-operative societies should be encouraged among farmers. Also, government should adopt policies that would encourage the formal credit institutions to grant soft loan for agricultural production.

KEYWORDS: Rural Households, Cooperative, Constraints, Credit, Kwara State

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eISSN: 1597-1074