Effects of trust fund model credit intervention on welfare of farmers’ households in Oyo State

Abstract

Over the years, successive governments in Nigeria prioritized agricultural sector in credit policies by establishing numerous agricultural credit programmes including Trust Fund Model (TFM). Several years on, TFM production cycles have been  completed and its benefits on welfare of farmers is expected to be obvious. This  study therefore investigated the effects of TFM on farmers’ households’ welfare in Oyo state. Simple random sampling was used to sample 40% of the beneficiaries  resulting in selection of 134 beneficiaries. Using interview schedule, data was  collected on beneficiaries’ socioeconomic characteristics, level of awareness of the  TFM components, constraints in accessing TFM funds and beneficiaries’ households’ welfare status. Data were analysed using descriptive (frequency, percentages and  mean) and inferential (Chi square and PPMC) statistics at p=0.05. Results reveal  that beneficiaries were aged 53±11.0 years, mostly male (85.2%), married (95.1%) and with household size of 6±3.0 persons. Amount of TFM funds received by  beneficiaries was N295,655±154,149. Less than half (41.8%) of the respondents  were highly aware of the components of TFM and were severely constrained by delay in processing of Interest Draw Back (0.74±0.88) and in release of disbursed funds  (0.71±0.77). Per Capita Expenditures (PCE) of N504, 816±420,330.00k suggest  that 63.9% of the respondents belonged to core poor category. It is concluded that  the TFM had not impacted positively on the beneficiaries. It is therefore  recommended that the administrative bottlenecks associated with fund release and  processing of interest drawback be addressed. Also, amount loanable should be  increased, while condition of collateral counterpart funding be relaxed.

Keywords: Agricultural credit, Per capital expenditure, Core poor, Household welfare