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Effect Of Credit Use On The Gross Margins Of Rice Enterprises In Abi Local Government Area Of Cross River State, Nigeria
Abstract
The study investigated the effect of credit use on gross margin of rice enterprise in Abi Local Government Area of Cross River State. To achieve the purpose of this study, a total sample size of ninety respondents was selected
through stratified random sampling technique. The result revealed that majority of the respondents (73.3%) utilised credit, out of these, only 4.4 percent sourced credit from formal sources. The chi-square result showed that there was a significant relationship between credit use and income. The chi-square calculated for income was17.879, while the chi-square tabulated was 5.991 (df = 2) at P<0.05. The t-test analysis also showed a significant difference between the mean gross margin of rice enterprise of those that utilize credit (13253.12) and those that did not utilise credit (4468.71).Based on these findings, rice farmers should be encouraged to use cooperatives as channels to source formal credit which attract cheaper interest rates and consequently increase their gross margin.
through stratified random sampling technique. The result revealed that majority of the respondents (73.3%) utilised credit, out of these, only 4.4 percent sourced credit from formal sources. The chi-square result showed that there was a significant relationship between credit use and income. The chi-square calculated for income was17.879, while the chi-square tabulated was 5.991 (df = 2) at P<0.05. The t-test analysis also showed a significant difference between the mean gross margin of rice enterprise of those that utilize credit (13253.12) and those that did not utilise credit (4468.71).Based on these findings, rice farmers should be encouraged to use cooperatives as channels to source formal credit which attract cheaper interest rates and consequently increase their gross margin.
