Socioeconomic Determinants of Small-Scale Crop Farmers' Access to Loan in Benue State, Nigeria

Julius Ajah and Simon Ameh

Background and Objective: Access to loan is one of the major challenges limiting small-scale farmers’ investment in agriculture in Nigeria. Unfortunately, it is a vital input in the production process. Against this backdrop, the study assessed small-scale crop farmers’ access to loan in Benue State, Nigeria. The main objective of this study was to determine if farmers’ socio-economic factors significantly influence access to loan. Materials and Methods: Benue State has an agricultural development programme (ADP) with an administrative structure for effective extension services. It was divided into zones, blocks and cells. From the cells, 300 farmers were selected through multistage technique while questionnaire was used for data collection. The data were analyzed using Logit regression model. Results: The Likelihood Ratio and Chi-square values of 262.06 and 14.62, respectively indicated that the model fitted the dataset well because the overall model was statistically significant (p<0.05). Among the 8 variables predicted to influence access to loan, only ownership of bank account was statistically significant (p<0.05). However, other variables also influenced access to loan but not at 5% probability level. In terms of relationship, marital status, household size, age, years of farming experience and owning of bank account positively influenced access to loan while gender, educational status and farm size were inversely related to loan access. Out of the 300 farmers interviewed, only 106 (35.33%) had access to loan and the average loan requested (246650.94) was significantly (p<0.01) higher than what was granted (171933.96). Conclusion: Some of the crop farmers’ socio-economic characteristics could be used to predict access to loan in Benue State, Nigeria.

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