జర్నల్ ఆఫ్ బిజినెస్ & ఫైనాన్షియల్ అఫైర్స్

Determinants of Borrowing Capacity of Small Holder Farmers in Cross River State, Nigeria

Abstract

Enimu S, Bassey JI and Eyo EO

This study examined the determinants of borrowing capacity of small holder farmers in Cross River State, Nigeria. A total of 455 farmers were randomly selected through a stratified random sampling technique. The study data was collected by well-structured questionnaire. Statistical tools such as simple descriptive statistics (table, frequency, percentage and mean) and a multiple regression analysis were used to examine the data. The results indicate that 60% of the farmers source their credit from informal financial sector while the mean borrowing capacity of the farmers was N550,500. The regression’s result demonstrated that the determinants of the farmers borrowing capacity included asset value, debt outstanding, and value of equity in asset, educational index, farm size and family size. The study further revealed that the major problems facing farmers are high interest, lack for collateral, short repayment periods, among others. Therefore, it was recommended that small holder farmers should increase their financial asset and Real estate purchases, while financial services providers should carefully study the determinants favorable for lending to small holder farmers in order to increase agricultural financing.