This study examined access to agro-credit by farmers in Kaduna state. This study employed survey research methodology which covered the three agricultural zones in the study area. To achieve the objective of the study, five research questions guided the study and one hypothesis was formulated. Hypothesis was tested using Chow test model. The data generated were analyzed using multiple regression and 4-point likert scale rating. A reliability coefficient of 0.78 was obtained using Cronbach Alpha to establish internal consistency. It was shown that, majority of the respondents (40%) were aged between 31 and 40 years, 32.5% where aged between 41 and 50 years and 18.33% were between 21 and 30 years. About 41.20% of the respondents had no formal education, 34.2% attended primary education, 16.7% obtained secondary certificate while 7.5% attended tertiary institution. About 48.3% of the respondents had farming experience of 20 years and above, 19.2% had farming experience of between 10 to 14 years and 17.5% had 15 to 19 years. Majority of the respondents (41.67%) sourced a total amount of between N100,000 and N400,000 from either formal or informal sources, 25.83% sourced less than or equal to N100,000. Others, 10.83%, 15% and 6.67% have obtained credit to the tune of N400,001 – 700,000, N700,000 – N1,000,000 and more than N1,000,000 respectively. Age, marital status, level of education, interest rate and credit awareness were the major determinants of (p<0.05) credit sourced by the farmers in the study area. Sixty-five percent and 52.5% of the farmers obtained their credit from informal sources (personal savings and rotating savings respectively) while 42.5% of them obtained theirs from formal sources. Lack of trust to pay back the credit (2.89), inability to receive the amount applied for (2.93), risk of repaying the credit because of crop failure (2.84), difficulty before getting the credit (2.63) and problem of getting guarantors (3.00) were the major problems under informal sources. For formal sources, time spent on getting the credit (2.58), complicated procedures (2.71), high interest rate (2.80), inadequate collateral security (3.00), repayment time is short (2.55), illiteracy (2.98), lack of good information about agro-credit (2.81) and lack of presence of banks in the rural areas (2.68) were the major problems encountered by farmers.

1.1      Background Information
With an estimated 140 million inhabitants and a population growth rate of 2.5% annually, Nigeria is the most populated country in sub-Saharan Africa and the 10th most populated country in the World (National Population Commission [NPC], 2006). Approximately, 49 percent of the population engages in agriculture as their major occupation. The agricultural sector is the mainstay of the majority of Nigerian rural poor, with over 70 percent of the active labour force in rural areas employed in agriculture and the sector contributing over 23 percent of the GDP in 2006 (World Bank, 2007).

Agricultural credit plays a critical role in agricultural development (Duong & Izumida, 2002). Farm credit has for long been identified as a major input in the development of the agricultural sector in Nigeria. The decline in the contribution of the sector to the Nigeria economy has been attributed to the lack of a formal national credit policy and paucity of credit institutions. The provision of credit or loanable fund (capital) is viewed as more than just another resource such as labour, land, equipment and raw materials (Rahji, 2010). It determines access to

all of the other resources which farmers require (Shephard, 1979). Agricultural practice requires money for the purchase of various factors of production including land. There are two main sources of agricultural financing; formal and informal sources. According to Nchouji (2007), the formal sources are organized and guided by law with effort on the part of the government, examples are Bank of Agriculture (BOA), commercial banks, supervised agricultural credit, cooperative societies and government agencies. Informal sources include friends, relatives, money leaders, saving societies and traditional groups. These sources are meant to facilitate and increase agricultural production. Though farmers may patronize these sources, but the implication involved is the provision of collaterals and other necessary requirement before obtaining those credit facilities. Oladeebo (2003), reported that years of farming experience with credit use and level of education were the major factors that positively and significantly influenced the amount of loan obtained by farmers.

Agricultural credit access has particular salience in the context of agricultural and rural development in Nigeria. Some 70% approximately of the population live in the rural areas with their main source of livelihood being agriculture. Recent studies showed that the growth rate of investment in the agricultural sector is less than that of the other economic sector. Therefore, financing agriculture is one of the most important factors to develop rural areas in developing countries (Kohansal and Mansoori, 2009). Credit accessibility is important for improvement of quality and quantity of farm products, so that it can increase farmer’s income and reduce rural migration. Credit constraints to farm households thus impose high cost on the society. This is in terms of rural unemployment, rural poverty, and distortion of production and liquidation of assets. Governments in both developed and developing countries attempt to overcome these problems by subsidizing credit, setting up Agricultural Credit Guarantee Fund Schemes (e.g. ACGFS in Nigeria, 1977) and specialized Agricultural Credit Bank (e. g NACB, 1973 now BOA, 2010) and stimulating institutional innovations in the financial system (e.g. People’s Bank, Community Bank, Rural Banking Schemes, etc) (Rahji, 2010).

The Nigerian agricultural sector is among the most heavily regulated sector of the Nigerian economy. The special interest of government in the agricultural sector is due to its relevance in the provision of raw materials for industries and most importantly the provision of food for the teaming Nigerian population and also serving as a source of foreign exchange for the economy (Adofu, Abula & Audu, 2010). The Nigerian agricultural sector is not alone in government intervention in terms of regulation, Akiri and Adofu (2007), opined that the banking industry owing to the nature of the activities and functions it performs in the economy, is also......

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