Impact of Microfinance on Smallholder Cassava and Rice Farms Productivity in Makurdi Metropolis, Benue State, Nigeria

Subject Areas : Extension and Economic

Francis  Ogebe ¹ (Department of Agricultural Economics, Federal University of Agriculture. P.M.B 2373 Makurdi, Benue State, Nigeria)
Ayuba  Ali ² (Department of Agricultural Economics, Federal University of Agriculture. P.M.B 2373 Makurdi, Benue State, Nigeria)
Ishaaqa  Olagunju ³ (Department of Agricultural Economics, Federal University of Agriculture. P.M.B 2373 Makurdi, Benue State, Nigeria)

Received: 2020-04-07 Accepted : 2020-09-15 Published : 2020-09-30

Keywords: Productivity, Determinants, Outputs, Credits, Farmers Microfinance,

Abstract :

This study was undertaken to investigate the impact of microfinance on agricultural productivity by smallholder farmers in Makurdi Metropolis of Benue State, Nigeria. Data were randomly collected from 120 farmers consisting of 60 credit beneficiaries (CB) and 60 non-credit beneficiaries (NCB) by which were analyzed through descriptive statistics and multiple regression analysis. The results of the regression analysis showed a clear impact of microfinance credit on agricultural productivity. Findings revealed that, the accessed credits help farmers to purchase inputs and improve farming technologies which ultimately transformed into higher productivity of the credit beneficiaries as CB farmers realized higher yields (52.1 bags) compared to the NCB farmers (24.6 bags). This is partly because the CB were relatively better in the use of inputs such as adoption of improved seeds, use of fertilizers and affordability of hired labor which ultimately enhanced their farm productivity. The study concluded that though microfinance credits has significant impact on agricultural productivity under smallholder farmers, access to microfinance credits by smallholder farmers in the study area is constrained by lack of microfinance credit information, high interest rates, and inadequate supply of credit institutions as well as risk averse nature of some farmers. Thus, in order to enhance agricultural productivity and improve the well-being of smallholder farmers, it is recommended that smallholder farmers should be facilitated to form “Savings and Credits Cooperative Unions” (SACCOS) for collective responsibilities of accessing credits and paying loans.

References:

1. Ajagbe, F. A. (2012). Application of probit to factors affecting small scale enterprises’ decision to take credit: A case study of Oyo State, Nigeria. Asian Economic and Financial Review, 2(8), 1064-1071.


2. Chulangani, H. M. A. and Ariyawardand, A. (2010). Analysis of Lending by Public and Private Micro-Financial Institutions to Microenterprises in NuwaraEliya.Sabaragamuwa University Journal, 7(1): 86-100.


3. Cornia, G. (1985). Farm size, land yields and agricultural production function: An analysis for fifteen developing countries. World Development, 13(4), 513-534.


4. Green, D. and Ng’ong’ola, D. (1993). Factors affecting fertilizer adoption in less developed countries. An application of multivariate logistic analysis in Malawi. Journal of Agricultural Economics,44(1), 99-109.


5. Guirkinger, C. and Boucher, S. (2008). Credit constraints and productivity in Peruvian agriculture. Journal of Agricultural Economics, 39(3), 295-308.


6. Khandker, S. (2005). Microfinance and poverty: Evidence using panel data from Bangladesh. The World Bank Economic Review, 19.


7. Ledgerwood, J. (2002). Microfinance handbook. An institutional and financial perspective. Banking with the poor. Washington D. C: The World Bank.


8. Majeha, R. O. and Nwachukwu, I. (2008). Microfinance Institutions in Nigeria, MPRA Paper, No. 13711.


9. Mellor, J. W. and Malik, S. J. (2017). The impact of growth in small commercial farm productivity on rural poverty reduction. World Development, 91: 1-10.

10. MkNelly, B. and Christopher, D. (1999). Impact of credit with education on mothers and their young children’s nutrition: Crecer credit with education program in Bolivia. Freedom from Hunger Research Paper No. 5. Davis, CA: Freedom from Hunger.

11. National Population Commission, (NPC, 2006). National Population Census Report, Abuja.

12. Oboh, V. and Ekpebu, I. (2010). Determinants of formal agricultural credit allocation to the farm sector by arable crop farmers in Benue State, Nigeria. African Journal of Agricultural Research,6(1): 29-36.

13. Okpara, B. C. (2010). Export Marketing: Catalyst for Nigeria Economic. Research Journal of International Studies, 13, 76-85.

14. Olawepo, R.A. (2010). Determining farmers’ income: A rural Nigeria experience. Journal of African Studies and Development, 2(4): 99-108

15. Premaratne, S.P. (2009). Empowerment of women through Self-Help Groups (SHGs): A study of SHG Microfinance Project in Sri-Lanka (forthcoming) with S.M.P).SenenayakaTilakaratna, Galappattige and Perera (2005).

16. Rweymamu, D. C., Kimaro, M. P. and Urassa, O. M. (2003). Assessing microfinance services in agricultural sector development: A case study of semi-formal financial institutions in Tanzania. Economic and Social Research Foundation. Dar es Salaam.

17. Opara, B.C. (2010). Nigerian Firms’ Non-Oil Export Involvement: An Economic Transformation Paradigm. European Journal of Social Sciences, 40(4), 547-556.