IMPACT OF MICROFINANCE BANKS' CREDIT FACILITIES ON AGRICULTURAL PRODUCTION IMPROVEMENT AMONG SMALL-SCALE FARMERS IN KWARA STATE
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Date
2016
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Publisher
Management and social sciences, Fountain University, Osogbo, Nigeria.
Abstract
Sustainable agricultural output is a major concern for government at all levels due to the tremendous benefits it creates for both individuals and the economy at large. In a bid to develop the agricultural sector, particularly within the rural space, several programme had been initiated by past governments, notable among is the microfinance banks (MFBs). This study examined the impact of loans and advances granted by microfinance banks on agricultural production improvement. Three-stage sampling technique was used to select 240 small-scale farmers that were administered with questionnaire for the purpose of having a cross-sectional outlook. The data was analyzed by descriptive and logistic regression model. The regression result reveals that loan from MFBs and farming experience were positively significant at p<0.01 and P<0.1 respectively. Only repayment period and interest interest rate were negatively significant at p<0.01 and p<0.05. The study concluded that MFBs' loans and advances, farming experience, repayment period and interest rate have significant impact on the likelihood of agricultural output improvement. The study recommended that monetary authorities should implement policies that would encourage MFBs to increase the proportion of loan allocated to the agricultural sector with single digit interest rate repayment. This would specifically help to increase output and thus, generally contribute to the living standard of small-scale farmers.
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Keywords
Microfinance, loans, agricultural output, logistics regression, small-scale farmers