Socio-economic determinants of smallholder rice (Oryza sativa) farmer’s access to Loan facilities, Abuja, Nigeria

Year 2022, Volume: 6 Issue: 4, 530 - 536, 30.12.2022

Olugbenga Alabı , Chinwe Edith Anekwe

https://doi.org/10.31015/jaefs.2022.4.5

Abstract

This research study focused on socio-economic determinants of smallholder rice farmer’s access to loan facilities, Abuja, Nigeria. Multi-stage sampling technique was adopted to select 100 smallholder rice farmers. Primary sources of data were used. Data were collected from smallholder rice farmers with the help of well-designed and well-structured questionnaire. Statistical and econometric tools were used for data analysis. The results show that 82% of smallholder rice farmers were between 31 to 50 years of age. About 67% of smallholder rice farmers had access to loan facilities. Sources of loan obtained by smallholder rice farmers are formal (68.66%) and informal sources (31.34%). Averagely, smallholder farmers obtained 200, 754.72 Naira and 129,558.82 Naira from formal and informal sources respectively. Age (X₁), farm size (X₂), household size (X₃), marital status (X₅), access to extension services (X₇) and membership of cooperative organizations (X₈) were statistically and significant socio-economic factors influencing smallholder rice farmers access to loan facilities at (P<0.05). In addition, level of education was statistically and significant socio-economic factors influencing smallholder rice farmers access to loan facilities at (P<0.01).The constraints encountered by smallholder rice farmers in accessing loan facilities were: lack of collaterals for formal sources, cumbersome administrative procedures, high interest rate for formal sources, late disbursement of loan, long distant to financial institutions for formal sources, small amount of loan, and short re-payment period. The study recommends that loan with single digit interest rate should be provided by the government; cumbersome administrative procedures involved in accessing loan should be addressed, micro finance banks should be located in rural areas to meet the need of smallholder rice farmers loan demand; smallholder rice farmers should be encouraged to join cooperative organizations in order for them to have easy access to loan facilities.

Keywords

Smallholder Rice Farmers, Loan Facilities, Socio-Economic Factors, Nigeria

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