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Apr 30, 2020Keywords:
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ACCESS AND DEMAND FOR CREDIT AMONG SMALL SCALE AGRO-BASED PROCESSORS IN UYO AGRICULTURAL ZONE, AKWA IBOM STATE, NIGERIA
Abstract
The study analysed the determinants of access and demand for credit among agro-based processors in Uyo
Agricultural Zone of Akwa Ibom State. A multi-stage sampling technique was employed to select 110 agro-based
processors (cassava graters and oil palm millers). A structured questionnaire was administered to the processors
to collect the required information. The descriptive statistics and Heckman two-step selection model were used to
analyze the information collected. Results show that majority of the processors were males, who had access to
credit information and ICT facility; were married and moderately educated. They were of average age (46.58
years), processing experience (19.83 years), household size of about 6 persons, belonged to a social group (0.76
years), and with an average annual income of about N305, 222.70. The empirical results revealed that the
processors' age, education, social capital, access to ICT, experience, household size and credit information were
significant determinants of access to credit. Also, education, experience, household size, machine capacity, social
group, labour cost, the amount of collateral, interest rate, distance to credit source and income from other sources
influenced the level of credit demand among the processors. To promote credit access and demand among agrobased
processors, it is recommended that, social capital formation among the processors is the key. Also,
intensifying adult education and family planning would enhance credit access and demand among the processors.
In addition, the youths should be encouraged to engage in agro-based processing as a way to decrease the cost of
labour and ensure the sustainability of the business in the State. Furthermore, internet coverage should be
expanded in the rural areas while the amount of interest rate charged on loans from the informal credit sources
should be moderated.
