Determinants of formal credit market participation among small scale agribusiness enterprises in Abia State, Nigeria

Abstract

The study analyzed the factors that influence formal credit market participation among agribusiness entrepreneurs in Abia state, Nigeria. Purposive and random sampling techniques were employed in the study. Eighty (80) agribusiness entrepreneurs were selected for the study. Data was obtained from the respondents through a set of questionnaire administered to them. Probit model was employed in analyzing the data obtained. The results showed that educational attainment of the entrepreneurs, family size, size of the enterprise, interest rate, and the demand for collaterals were significant in explaining the factors that influence credit market participation among agribusiness entrepreneurs in the study area. The study recommends that, entrepreneurs should form co-operative societies so as to pull their resources together, rural banking scheme should be established and strengthened with less emphasis on collaterals, reduction of interest rates, among others.