Effect of access to microcredit on productivity and profitability of cassava farming in Osun State, Nigeria

Abstract

The study examined the effect of access to microcredit on the productivity and profitability of cassava production. A multi-stage sampling procedure was used to obtain the data from 100 respondents. Primary data collected were analyzed using descriptive statistics, budgetary analysis and stochastic production frontier. Result showed that cassava farming in the study area was dominated by male farmers with about 81.3% and82.7% for microcredit users, and non-microcredit users, respectively. It also revealed that few farmers (48%) had access to credit. The farm budgetary analysis revealed that the net profit per hectare were ₦68,719 for microcredit users and ₦68,298 for non-microcredit users. The distribution of the technical efficiency according to accessibility to credit showed that the microcredit users were little more technically efficient (TE=0.9638) than the nonmicrocredit users (TE=0.9556). The result showed that labour, farm size, and fertilizer significantly influenced technical efficiency among users while farm size, fertilizer, gender and extension visits significantly influenced technical efficiency among non-microcredit users. The study concluded that cassava production was more profitable and efficient among cassava famers who had access to microcredit in the study area. The study recommended that cassava farmers should be encouraged with improved access to microcredit in order to boost their productivity and profit level in the study area.

Keywords: Microcredit, productivity, profitability and cassava production