Financing Foodstuff Marketing In Akwa Ibom State, Nigeria: Some Considerations

Abstract

The introduction of micro credit schemes to provide financial services to the small operators in the food marketing industry deserve some caution because available literature confirms that formal credit programme involving small operators in the agricultural sector have low repayment history. This study assessed how micro finance schemes directed at the small operators in the food marketing industry can package result oriented financial services for the success of the lending schemes. The report is based on panel data obtained in a research involving 116 food retailers in Akwa Ibom State. The simple random sampling procedure was used to select the respondents. Descriptive statistics such as means and percentages, and the multiple regression analytical technique were used to analyze the data. The results show that among the palm oil, grains, vegetable and seafood sellers transport cost had significant effects on the marketing margin, are positively related but unit increase in their numbers adds less than proportionately to the marketing margin. Among the palm oil and grain sellers, the quantity of produce handled had significant effect on, are positively related to, but bring about a less than proportionate increase to the marketing margin. For seafood and vegetable sellers, more margin can be ensured if more quantity of the seafood are handled but efforts must be made to assist the traders handle such quantity that will bring about more than proportionate increase in the marketing margin. Younger sellers make better margin comparatively. Micro finance schemes directed at the operators in the food marketing sub sector must be designed to provide financial and non-financial services that are accompanied with appropriate package of dynamic and static incentives to motivate and compel loan beneficiaries to repay loans. The credit package must include efforts to direct credit to younger sellers, reduce the transport cost and increase the quantity of produce handled so as to ensure that the operators earn satisfactory margins to repay loans. More importantly regular repayment schedule designed to match the time pattern of earnings of the beneficiaries and appropriate research instrument must be packaged alongside these financial and non-financial services to add impetus to loan repayment, identify problems and solutions that can make the micro-finance scheme a going concern.

KEY WORDS: Micro finance, marketing margin, Loans repayment.

Global Journal of Agricultural Sciences Vol.3(1&2) 2004: 35-40