Agricultural lending decision: a tobit regression analysis

Olagunju, F. I.; Ajiboye, Akinyele John

doi:10.4314/ajfand.v10i5.57897

Cited by 22 publications

(24 citation statements)

References 18 publications

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“…The effect of finance in the development of any sector of the economy cannot be outsourced and agriculture is not an exception. Credit institutions in Nigeria, lack formal credit policy and paucity which can assist farmers to access credit and is one of the reasons for the decline in agricultural contribution to the economy (Olagunju and Ajiboye, 2010). Similarly, farmers are also faced with the problem of late loan release or disbursement, nonfulfilment of collateral requirements, diversification of funds by financial institutions for non-agricultural purposes (Nwaru, Essein and Onuoha, 2011).…”

Section: Introductionmentioning

confidence: 99%

Assessment of Agricultural Credit Sources and Accessibility in Nigeria

Ukwuaba¹

2020

RAAE

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Rural and small holder famers in Nigeria and other developing countries have low capital base and poor access to finance. The inability of these farmers' access to adequate credit has increased the problem of low efficiency in production. Inadequate credit supply is a major problem with which other production factors may exert negative influence on farmers' output and efficiency. In ascertaining the sources and accessibility of credit by crop farmers in Enugu-Ezike in Enugu State, Nigeria, the sources of credit to farmers, the socioeconomic characteristics of crop farmers' that have access to credit, access to credit constraints and possible ways of improving farmers' access to credit were investigated. Primary data collected through the administration of questionnaire were analysed using descriptive statistics and probit regression. Results showed that most crop farmers obtained credit mainly for farming and have accessed credit through informal sources, with friends and relatives being the most popular source. Majority of the farmers, who obtained information about credit through phone calls agreed that there were no delays in loan approval. Although, probit regression revealed that the independent variables (gender, age, marital status, education, household size, farm size, membership of cooperatives and farming experience) were not significant in jointly affecting access to credit at all probability levels, however, membership of cooperatives had an individually negative significant relationship with access to credit at the 10% (p<0.10) level. Recommendations that will improve access to credit include: increasing farmers' access to information; reducing loan acquisition rigidity; reducing interest rate; having bank account; establishment of community and agricultural banks in the rural areas with simple procedures for securing loans; and the mobilization of farmers into groups to maximize the benefit of collective investment or group savings.

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Section: Introductionmentioning

confidence: 99%

Assessment of Agricultural Credit Sources and Accessibility in Nigeria

Ukwuaba¹

2020

RAAE

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“…The role of agriculture in human development cannot be overemphasized. This includes provision of the basic food requirements of human populations; it is the predominant occupation of the working population, especially in agrarian nations; an important way of life, culture and custom of the people (Olagunju and Ajiboye, 2010). Agriculture is the economic mainstay of the majority of households in Nigeria and is a significant sector in Nigeria's economy (Ayeomoni and Aladejana, 2016).…”

Section: Introductionmentioning

confidence: 99%

Impact of commercial bank credit on agricultural output in Nigeria

Oyelade

2019

RIC

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Purpose. The purpose of this study was to investigated the impact of commercial bank credits on agricultural output in Nigeria over the period 1980 to 2015 by setting three specific objectives which are to examine the trend of commercial bank credit and agricultural output in Nigeria; to investigate the effect of commercial bank credit on agricultural output in Nigeria and to investigate the effect of commercial bank credit on subsector of agriculture in Nigeria. The trend analysis and the impact of commercial bank credit on subsector of agriculture in Nigeria make this work unique and different from other studies in this area. Trend analysis was used to achieve the first objective and fully modified ordinary least square (OLS) for objective two and three. Methodology. The study employed Fully Modified Ordinary Least Squares (FMOLS) approach. Findings. It was evidenced that interest rate on commercial banks’ credit to agriculture and deposit money bank’s assets are statistically significant in determine agricultural output in Nigeria within the period considered. Also, commercial bank loan on agriculture and deposit money bank’s assets determine the output of crop production in Nigeria; commercial bank loan on agriculture and interest rate on commercial banks’ credit to agriculture determine the output of livestock production in Nigeria and commercial bank loan on agriculture and interest rate on commercial banks’ credit to agriculture determine the output of forestry in Nigeria while commercial bank loan on agriculture and interest rate on commercial banks’ credit to agriculture determine the output of fishing in Nigeria. Limitations. This study is limited because the study does not include other variables that determine the output of agricultural sector in Nigeria. Also, other theories and methods can still be used by other researcher to make it different from this work. Originality. This is an original work and has neither been published in any other peer-reviewed journal nor is under consideration for publication by any other journal.

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“…The World Bank (1996) opined that credit is necessary for small-scale farmers to increase their agricultural productivity and farm income; however, their access to institutional credit is curtailed. Institutional supply of agricultural credit however remains inadequate; and this continues to impede the transfer of technology and investment into agriculture (Olagunju & Ajiboye, 2010). Osuntogun (1980) holds the view that unless production credit is made available on suitable terms, the majority of the small farmers will be seriously handicapped in adopting profitable technology.…”

Section: Introductionmentioning

confidence: 99%

Analysis of the profitability and credit accessibility among Garri processors in Epe, Lagos State, Nigeria

Abasilim¹,

Balogun²,

Adeyemi³

2019

Global Journal of Agricultural Sciences

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This study examined profitability and credit accessibility among garri processors in Epe, Lagos State. Nigeria. It examined the profitability of garri processing enterprise and determined factors militating against credit access by garri processors in Epe. Multi-stage sampling technique was used to select the study area, first stage was the purposive selection of Epe, second stage was the random selection of two communities from each of the three zones in Epe LGA while the third stage involved random selection of 20garri processors from each community, totalling 120 processors. Ten (10) improperly filled question naires reduced the total to 110 Respondents sampled. The data collected were analysed using descriptive statistics, profitability analysis and Logit model. The study revealed that more females (89.1%) than male (10.9%) were garri processors, as many as 68.2% married and 4.5% unmarried Respondents, and average household size of 6.The mean year of experience in garri processing is16. The average weekly total cost incurred by the Respondents was ₦33,531.39 while total revenue was ₦51,211.82. The Rate of Return on Investment (RRI) of 53% showed an earning of 53% profit on every naira invested. About 68.2% of Respondents did not belong to cooperative society. There was a low probability of credit acquisition to increase the production level of garri in the study area. The problems militating against credit accessibility in the study area include high interest rate, low income, no savings, non-membership in cooperative groups, and lack of information on credit availability. It is recommended that government should subsidize the cost of inputs for garri processors. The local government through Extension agents should embark on enlightenment programmes to educate the processors on modalities for credit accessibility and modern processing methods. There is also need for financial institutions to look into the conditions for obtaining credit by processors.

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Agricultural lending decision: a tobit regression analysis

Cited by 22 publications

References 18 publications

Assessment of Agricultural Credit Sources and Accessibility in Nigeria

Assessment of Agricultural Credit Sources and Accessibility in Nigeria

Impact of commercial bank credit on agricultural output in Nigeria

Analysis of the profitability and credit accessibility among Garri processors in Epe, Lagos State, Nigeria

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