Access and usage of formal financial services among small-scale cassava farmers for productivity in Enugu state, Nigeria.

Abstract

Purpose: Access to financial resources has been identified as one of the ways of boosting farm output, and this can be achieved through improving access to and usage of formal financial services. The study thus evaluated the effects of financial inclusion on cassava production among small-scale farmers in Enugu state, Nigeria. Methodology: A multi-stage sampling technique was employed in the selection of 162 cassava farmers in Enugu State. The data collected were analyzed using descriptive statistics, multiple regression analysis, and Likert scale rating Technique. Finding: Empirical results showed that the average of all respondents who participated in the survey was 43 years and 62.35% of the total respondents were males. Additionally, the result showed mean household size (4.75), mean years of cassava farming experience (5.86 years), and mean farm size (0.45 hectares). The majority (88.30%) of the farmers had access to a formal financial institution and the average amount saved in the last 12 months was ₦162,154.32. The multiple regression analysis showed that socioeconomic characteristics influencing cassava output are household, farming experience, farm size, farm income, and input cost. Additionally, financial inclusion positively influenced cassava output through access to formal financial institutions and level of savings. Originality: The findings revealed the positive effect access and usage of formal financial services have on the economy. Therefore, the study recommends that farmers be encouraged to improve their usage of formal financial services such as improving their savings levels at banks and banks to reduce charges on formal financial services.

Keywords

• financial inclusion
• small-scale farmers
• cassava production
• access to formal finance
• barriers to formal finance

Nijerya'nin Enugu eyaletinde verimlilik için küçük ölçekli manyok çiftçilerinde resmi finansal hizmetlere erişim ve kullanımı.

Abstract

Amaç: Finansal kaynaklara erişim çiftlik üretimini artırmanın yollarından biri olarak tanımlanmıştır ve bu, resmi finansal hizmetlere erişimi ve kullanımını iyileştirerek elde edilebilir. Bu nedenle çalışma, Nijerya'nın Enugu eyaletindeki küçük ölçekli çiftçiler arasında finansal katılımın manyok üretimi üzerindeki etkilerini değerlendirmiştir. Metodoloji: Enugu Eyaletindeki 162 manyok çiftçisinin seçiminde çok aşamalı bir örnekleme tekniği kullanıldı. Toplanan veriler tanımlayıcı istatistikler, çoklu regresyon analizi ve Likert ölçeği derecelendirme tekniği kullanılarak analiz edildi. Bulgular: Ampirik sonuçlar, ankete katılan tüm katılımcıların ortalamasının 43 yaşında olduğunu ve toplam katılımcıların %62,35'inin erkek olduğunu gösterdi.. Ek olarak, sonuç ortalama hane halkı büyüklüğünü (4,75), ortalama manyok çiftçiliği deneyimini (5,86 yıl) ve ortalama çiftlik büyüklüğünü (0,45 hektar) gösterdi. Çiftçilerin çoğunluğu (%88,30) resmi bir finans kuruluşuna erişebiliyordu ve son 12 ayda ortalama tasarruf edilen miktar ₦162.154,32 idi. Çoklu regresyon analizi, manyok üretimini etkileyen sosyoekonomik özelliklerin hane halkı, çiftçilik deneyimi, çiftlik büyüklüğü, çiftlik geliri ve girdi maliyeti olduğunu gösterdi. Ek olarak, finansal katılım resmi finans kuruluşlarına erişim ve tasarruf düzeyi yoluyla manyok üretimini olumlu yönde etkiledi. Özgünlük: Bulgular, resmi finansal hizmetlere erişimin ve kullanımının ekonomi üzerinde olumlu bir etkiye sahip olduğunu ortaya koydu. Bu nedenle, çalışma çiftçilerin bankalardaki tasarruf seviyelerini artırmak ve bankaların resmi finansal hizmetlerdeki ücretleri azaltmak gibi resmi finansal hizmetlerin kullanımını iyileştirmeleri için teşvik edilmelerini önermektedir.

Keywords

• finansal katılım
• küçük ölçekli çiftçiler
• manyok üretimi
• resmi finansmana erişim
• resmi finansmanın önündeki engeller

References

1. Abdulmalik, R. O., Onyinbo, O. and Sami, R.A. (2013), “Determinants of crop farmers’ participation in agricultural insurance in the Federal Capital Territory, Abuja, Nigeria”, Greener Journal of Agricultural Sciences, Vol. 2 No. 2, pp.21-26, https://doi.org/10.15580/GJAS.2013.1.111212255.
2. Abraham, T. W. (2018), “Estimating the effects of financial access on poor farmers in rural northern Nigeria”. Financial Innovation, Vol. 4 No. 1, pp.25. https://doi.org/10.1186/s40854-018-0112-2.
3. Adegbite, O. and Machethe, C.L. (2022), “The Impact of financial inclusion on the livelihoods of rural smallholder farmers in Nigeria”. The African Finance Journal, Africa Growth Institute, Vol. 24 No. 2, pp. 38-50. https://journals.co.za/doi/abs/10.10520/ejc-finj_v24_n2_a3.
4. Adewuyi, A. K., Omar, I. A., Offar, G., and Idris, A. (2024), “Factors affecting groundnut production by small-scale farmers in chibok local government area of Borno state, Nigeria”. African Journal of Agricultural Science and Food Research, Vol. 14 No. 1, pp.13-20, https://doi.org/10.62154/4b287j47.
5. Adeyemo R., and Bamire, A. S. (2005), “Savings and investment patterns of cooperative farmers in southwestern Nigeria”. Journal of Social Sciences, Vol. 11 No. 3, pp.183-192. https://doi.org/10.1080/09718923.2005.11892512.
6. Afolabi J. A. (2010), “Analysis of loan repayment among small-scale farmers in Oyo State, Nigeria”. Journal of Social Sciences, Vol. 22 No. 2, pp.115-119, https://doi.org/10.1080/09718923.2010.11892791.
7. Akintayo, O.I., Oyedokun, M.O. and Akindele, M.O. (2022), “Agricultural Productivity and access to market among farmers in Ekiti state, Nigeria”. Journal of Tropical Agriculture, Food, Environment, and Extension, Vol. 21 No. 2, pp.79–84, https://doi.org/10.4314/as.v21i2.9.
8. Al-Mustapha, I.I. and Ashiru, A.A. (2021), “Challenges faced by crop farmers: A survey of subsistent farmers in Kwara State, Nigeria”. International Journal of Agricultural Science and Food Technology, Vol. 7 No. 2, pp.207-211. https://dpo.org/10.17352/2455-815X.000108.

9. Anyawale, A.B and Bamire, A.S. (2000), “Rural income, savings and investment behavior among farmers in Osun State of Nigeria”, Indian Journal of Economics, Vol. 320, pp.49-60.
10. Arowolo, A. O., Ibrahim, S. B., Aminu, R. O., Olanrewaju, E. A., Ashimiu, S. M., and Kadiri, O. J. (2022), “Effect of financial inclusion on livelihood diversification among smallholder farming households in Oyo state, Nigeria”. Nigerian Agricultural Journal, Vol. 51 No. 3, pp.67–75.
11. Atagher, M. M. (2013), “Effects of the Benue ADP’s Cassava production technologies on the productivity and incomes of women farmers in Benue State, Nigeria”. Department of Agricultural Economics, University of Nigeria, Nsukka.
12. Awotide, B. A., T. Abdoulaye, A. Alene, and V. M., Manyong (2015), “Impact of access to credit on agricultural productivity: evidence from smallholder cassava farmers in Nigeria”. A contributed paper prepared for the International Conference of Agricultural Economists (ICAE), Milan, Italy.
13. Ayanda I.F., and Ogunsekan O. (2012), Farmers’ perception of repayment of loans obtained from Bank of Agriculture, Ogun State, Nigeria. Journal of Agricultural Science, Vol. 3, pp.21-27, https://doi.org/10.1080/09766898.2012.11884681.
14. Balana, B.B. and Oyeyemi, M.A. (2022), “Agricultural credit constraints in smallholder farming in developing countries: Evidence from Nigeria”. World Development Sustainability, Vol. 1, pp.100012, https://doi.org/10.1016/j.wds.2022.100012.
15. Bertram, O.A., Nwankwo, S.N.P. and Onwuka, I.O. (2016), “Full financial inclusion (Ffi): A pre-requisite for inclusive economic development in Nigeria”. Advances in Social Sciences Research Journal, Vol. 3 No. 9, pp.65-78, https://doi.org/10.14738/assrj.39.2128.
16. Central Intelligence Agency (2007), “The CIA World Factbook, Book 2008”. Skyhorse Publishing Inc.
17. Chukwudobelu, A.S., Enwelu, A.I., and Obianefo, C.A. (2024), “Effect of financial inclusion on market participation of rice farmer’s cooperative members in Anambra State”. International Journal of Life Science Research Archive, Vol. 6 No. 1, pp.96–107, https://doi.org/10.53771/ijlsra.2024.6.1.0033.
18. Chukwulobelu, E. E., Emodi, N. V., and Igbokwe, C. C. (2024), “Financial inclusion and agricultural productivity: The case of cassava farmers in Nigeria”. Journal of Agricultural Economics, Vol. 12 No. 3, pp.233-248.
19. Chauvin, N.D., Mulangu, F., and Porto, G. (2012), Food production and consumption trends in Sub-Saharan Africa: Prospects for the transformation of the agricultural sector. United Nations Development Program (UNDP), Regional Bureau for Africa, WP 2012-011: February 2012.
20. De Koker, L. and N. Jentzsch (2012), “Financial inclusion and financial integrity: Aligned incentives”. World Development, Vol. 44, pp.267-280, https://doi.org/10.1016/j.worlddev.2012.11.002.
21. ENADEP. (2009), Enugu State Agricultural Development Programme: Annual Report. p. 36
22. Enhancing Financial Innovation and Access in Nigeria (EFInA) (2013), Enhancing Financial Inclusion in Nigeria. A publication on online banking in Nigeria.www.EFInA.com
23. Enhancing Financial Innovation and Access (2010), Access to Financial Services in Nigeria. IFPRI Environmental and Production Technology Division, Working Paper No. 106, Washington D.C.
24. Enhancing Financial Innovation and Access in Nigeria (EFInA) (2023), Unlocking insights to accelerate financial and economic inclusion. A2F 2023 survey highlights.
25. Ezike, J. O. (1998), Delineation of Old and New Enugu State Bulletin. Ministry of Works, Land and Survey, Enugu State.
26. FAOSTAT. (2018), Explore Data. Rome, Italy: Food and Agriculture Organization of the United Nations.
27. Fowowe, B. (2020), "The effects of financial inclusion on agricultural productivity in Nigeria", Journal of Economics and Development, Vol. 22 No. 1, pp.61-79. https://doi.org/10.1108/JED-11-2019-0059.
28. Hauser, S., Wairegi, L., Asadu, C.L.A., Asawalam, D.O., Jokthan, G., and Ugbe, U. (2014), Africa Soil Health Consortium: Cassava cropping guide. Nairobi. https://www.iita.org/wp-content/uploads/2016/06/Cassava_system_cropping_guide.pdf
29. Hauser, S., Chikwendu, U., and Olisa, E. (2014), “Comparative analysis of cassava yield in Nigeria”. Nigerian Journal of Agricultural Science, Vol. 10 No. 2, pp.45-56.
30. Herliana, S., Sutardi, A., Aina, Q., Aliya, Q.H. and Lawiyah, N. (2018), “The constraints of agricultural credit and government policy strategy”. MATEC Web of Conferences, Vol. 215, pp.02008, https://doi.org/10.1051/matecconf/201821502008.
31. Horioka, C.Y. and Junmin, W. (2007), “The determinants of household saving in China: A dynamic panel analysis of provincial data”. Journal of Money, Credit and Banking, Blackwell Publishing, Vol. 39 No. 8, pp.2077-2096.
32. Ibrahim, S. B., Aminu, R. O., Arowolo, A. O. and Oyedele, A. M. (2023), “Effects of Financial Inclusion on Ownership of Productive Assets among Cassava Processors in Oyo State, Nigeria”. Nigeria Agricultural Journal, Vol. 54 No. 1, pp.11-19.
33. Idumah, F.O., Awe, F., and Owombo, P.O. (2020), “Factors influencing farm output and income among agroforestry farmers of the fringe communities of sapoba forest reserve, Edo state Nigeria”. Tanzania Journal of Agricultural Science, Vol. 19 No. 2, pp.107-115.
34. IITA. (2022), Cassava (Manihot esculenta), Retrieved from Cassava website: https://www.iita.org/cropsnew/cassava/#1620830669265-010844bf-2df1.
35. Ikuemonisan, E.S., Mafimisebi, T.E., Ajibefun, I., and Adenegan, K. (2018), “Cassava production in Nigeria: trends, instability and decomposition analysis (1970-2018)”. Heliyon, Vol. 6 No. 10, pp.e05089, https://doi.org/10.1016/j.heliyon.2020.e05089.
36. Inoni, O. E. (2009), “Impact of rural roads and market infrastructure on output and income of farming households in Ughelli south delta state”. FAMAN Journal/Farm Management Association of Nigeria, Vol. 10 No. 2, pp.14-21.
37. Jovanoić, M.N. (1998), International economic integration: critical perspectives on the world economy. Routledge.
38. Kalunda, E. (2014), Financial inclusion impact on small-scale tea farmers in Nyeri county, Kenya. World Journal of Social Sciences, Vol. 4 No. 1, pp.130 – 139.
39. Karerwa, C. (2023), Effect of financial inclusion on agricultural farm performance in Rwanda: A case study of COMSS cooperative. International Journal of Research and Innovation in Social Science (IJRISS), Vol. 7 No. 12, pp.641-688, https://dx.doi.org/10.47772/IJRISS.2023.7012051.
40. Kibet, L.K., Mutai, B.K., Ouma, D.E., Ouma, S.A., and Owuor, G. (2009), “Determinants of household saving: a case study of smallholder farmers, entrepreneurs and teachers in rural areas of Kenya”. Journal of Development and Agricultural Economics, Vol. 1, pp.137- 143.
41. Ksoll, C., Lilleør, H. B., Lønborg, J. H., and Rasmussen, O. D. (2016), “Impact of village savings and loan associations: Evidence from a cluster randomized trial”. Journal of Development Economics, Vol. 120, pp.70–85. https://doi.org/10.1016/j.jdeveco.2015.12.003.
42. Mahendra, S. D. (2006), “Financial inclusion: Issues and challenges”. Econ. Political Weekly, Vol. 41 No. 41, pp.4310-4313.
43. Mobio, A. J., Fokou, G., Aka, S., Kouassi, K. B., Kreppel, K. S., Kouakou, K. P., Amanzou, N.A.A., Dao, D., and Bonfoh, B. (2021), “Exploring beyond the conjunctural rhetoric: sociocultural drivers for the “cassava crisis” in Côte d'Ivoire”. Agricultural and Food Economics, Vol. 9 No. 2, pp.1-20. https://doi.org/10.1186/s40100-020-00174-0.
44. Njoku, J.E. and Odii, M.A.C.A. (1991), “Determinants of loan repayment under the special emergency loan scheme (SEALS) in Nigeria: A case study of Imo state”. African Review of Money, Finance and Banking, Vol. 13 No. 1, pp.165-169.
45. Nwafor, M. C. and Yomi, A. J. (2018), “The nexus between financial and economic growth: Evidence from Nigeria”. International Journal of Research and Innovation in Social Sciences, Vol. 2 No. 4, pp.143 -149.
46. Nwambeke, G. C., Enyosa, K., Duruzor, I. G., and Oko, R. A. (2016), “Eliminating the barriers to financial inclusion: A panacea to achieving inclusive economic growth in Nigeria”. International Network Organization for Scientific Research Arts and Management, Vol. 2 No. 1, pp.15-24.
47. Nwankwo O. and Nwankwo N. (2014), “Sustainability of financial inclusion to rural dwellers in Nigeria: Problems and the way forward”. Research Journal of Finance and Accounting, Vol. 5 No. 5, pp.24-31.
48. Nwidobie, B.M. (2019), “Financial inclusion index in Nigeria: An exploratory analysis”. International Journal of Publication and Social Studies, Vol. 4 No. 1, pp.26-36, https://doi.org/10.18488/journal.135.2019.41.26.36.
49. Obisesan A. and Adeyonu A (2018), Financial inclusion of arable crop farmers in Nigeria. 20th International Conference of Agricultural Economics, Vancouver.
50. Olaniyi E. (2017), Back to the land: “The Impact of financial inclusion on agriculture in Nigeria”. Iranian Economic Review, Vol. 24 No. 1, pp.885-903, https://doi.org/10.22059/ier.2017.64086.
51. Olaniyi, O. A., Adetumbi, S. I. and Adereti, M. A. (2013), “Accessibility and relevance of information and communication technologies (ICT) among cassava farmers in Nigeria”. African Journal of Agricultural Research. Vol. 8, pp.4514-4522. https://doi.org/10.5897/AJAR2013.7260.
52. Onalo U., Mohd L. and Ahmad K. (2017), “Financial inclusion and the Nigerian economy: Empirical evidence”. Asian Journal of Economics, Business and Accounting, Vol. 4 No. 4, pp.1-10, https://doi.org/10.9734/AJEBA/2017/26842.
53. Ribaj, A., and Mexhuani, F. (2021), “The impact of savings on economic growth in a developing country (the case of Kosovo)”. Journal of Innovation and Entrepreneurship, Vol. 10 No. 1, pp.1-13, https://doi.org/10.1186/s13731-020-00140-6.
54. Sanne, V. (2008), “Sustainability issues in the tea sector: A comparative analysis of six leading producing countries”. Stichting Onderzoek Multinationale Ondernemingen (Centre for Research on Multinational Corporations), https://ssrn.com/abstract=1660434.
55. Tambi, M. D. (2018), “Emergence of agricultural platforms and food production in smallholder firms”. Agricultural Research and Technology Open Access Journal, Vol. 19 No. 2, p.556084, https://doi.org/10.9080/ARTOAJ.2018.19.556084.
56. Ugwuja, V.C. and Attah, C. (2020), “Determinants of farmers' financial inclusion in Ogba local government area (ONELGA) of Rivers state, Nigeria”. Nigerian Agricultural Policy Research Journal (NAPReJ), Vol. 8 No 1, pp.48-56. https://doi.org/10.22004/ag.econ.320387.
57. Ukwuaba, I.C., Arene, C.J., Okpukpara, C.B., Omeje, E.E., Onyenekwe, C.N., Okpukpara, V., Onah, O.G. and Offorma, J.T. (2024), “Unpacking the drivers of market orientation: Evidence from smallholder rice farming households in southeast Nigeria”. Ianna Journal of Interdisciplinary Studies, Vol. 6 No 1, pp.16-32, https://doi.org/10.5281/zenodo.10865827 .
58. Williams, L. (2008), Nigeria: The Bradt Travel Guide. p.196. ISBN 1-841-62239-7.
59. World Bank (2021), Overview: National Financial Inclusion Strategies. The World Bank IBRD.IDA Brief, November 2021
60. Yamane, T. (1967), Statistics, An Introductory Analysis, (2nd Ed.), New York: Harper and Row
61. Yusuf, W. A., Hamzat, O. A., Akin-Olagunju, O. A., and Yusuf, S. A. (2019), “Effects of credit constraint on technical efficiency of cassava farming households in Oyo state, Nigeria”. Ibadan Journal of Agricultural Research, Vol. 15 No. 1, pp.1-14. Retrieved from https://www.researchgate.net/publication/357285269.
62. Zins, A., and Weill, L. (2016), “The determinants of financial inclusion in Africa”. Review of Development Finance, Vol. 6 No 1, pp.46-57. https://doi.org/https://doi.org/10.1016/j.rdf.2016.0 5.001.