Effect of micro-finance bank credit on output of farmers in Minna metropolis, Niger State, Nigeria.

Abstract

This study was carried out to examine the effect of microfinance bank credit on output of Arable crop farmers in Minna Metropolis, Niger State Nigeria. Specifically, the study described the socioeconomic characteristics of arable crop farmers (users and non users of microfinance bank credit), examined the effect of microfinance bank credit on arable crop production, identify the major constraints associated with microfinance banks. 60 users and 60 non users of microfinance banks credit were selected for the survey through a multistage sampling procedure making a total of 120 respondents. The sample was drawn from two microfinance banks, namely, Endwell microfinance bank and LAPO microfinance bank. Primary data were obtained using questionnaires administered to the respondents. Data were analyzed using descriptive statistics and multiple regression analysis.The results showed that 38% of the respondents were within the ages of 31 and 40 years, 73% were males, 53% had farming experience of between 11 and 20 years, 58% had family size of 1-3 persons and 88% had formal education at various levels. The result of the regression analyses showed that farm size (P< 0.01), amount of credit received(P< 0.01), seeds (P< 0.01) and farming experience (P< 0.01), were the factors that influenced output positively, while education influenced output negatively. Also the study identified bereucratic procedure in accessing the loan, high interest rate and distance to microfinance among others as the most pressing constraints encountered by respondents in accessing the loan. Thus the study recommended that farmers should apply for microfinance credit through cooperative societies to enhance easy access.