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UTILIZATION OF INSTITUTIONAL CREDIT FACILITIES AMONG FARMERS

CHAPTER ONE INTRODUCTION 1.1 BACKGROUND TO THE STUDY Credit is an instrument whose effectiveness depends on the economic and financial policies that go with it (Nwaru, 2004). The demand for credit has increased as a result of increased economic activities in the informal sector (Tra and Lensink, 2004). Credit availability to agriculture is justified when farmers are faced with low savings capacity, poorly developed rural financial markets and limited availability of appropriate farm technologies whose adoption is constrained by shortage of funds. If well applied, credit should increase the size of farm operations, introduce innovations in farming, encourage capital formation, improve marketing efficiency and enhance farmers‟ consumption (Nwaru, 2004

Access to credit is one major link in the chain of agricultural development. For farmers to increase food production, they need better access to agricultural support system such as credit, facilities as well as the organizations that channel these services (FAO, 2007; IFAD, 2002). It has been observed that over 60% of Nigerian farmers live below poverty line and rural farmers rarely have enough cash for production (Okunmadewa, 2003). Farmers‟ access to institutional credit facilities is considered to be an accelerator of agricultural development through a wide spread break away from traditional technology and by fostering the generalized adoption of developed and improved technology. Farm credits are however important means for improving farm capital investment in Nigeria, with which there may be no progress in the agricultural sector to adequately fulfill its expected roles or Millennium Development Goals (Musa, Hanisu and Yakubu, 2010). Flores (2004)in corroborating this assertion, stated that credit if made available to farmers

STATEMENT OF THE RESEARCH PROBLEM

The renewed focus on agriculture as holding the key to national development, in the face of an uncertain and vulnerable oil economy, poses a compelling challenge to farmer‟s access to credit facilities and their full participation in sustainable agricultural

development.The importance of credit in agricultural production cannot be overemphasized. Inadequacy of finances and funds is a major constraint to farmers. Nwaru (2004) identified insufficient and poor fund delivery to farmers as the most limiting factors that affect agricultural production. Studies relating tocredit access and utilization among farmers have been carried out. For instance, Omonona et al., (2010) carried out a study on the determinants of credit constraint conditions and production efficiency among farming households in South Western Nigeria.The study employed probit regression model to identify the determinants of constraints to credit among farmers in that area. The results of the probit model showed that the coefficient of age, gender, education and dependency ratio of farmers were found to influence credit constraint conditions of the farmers and were significant at the 5% and 10% level.

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NAME:                       TITUS AYANI SOLA
BANK:                       FIRST BANK PLC
ACCT NO:                  3111741042
ACCOUNT TYPE:       SAVINGS
AMOUNT:                  N2000

NAME:                       TITUS AYANI SOLA


BANK:                       GTB BANK
ACCT NO:                  0262412831
ACCOUNT TYPE:       SAVINGS

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Updated: 16th February 2019 — 4:09 pm

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