Socio–Economic factors influencing utilization of bank of agriculture credit scheme by farmers in Oyo State, Nigeria

Abstract

The study examined the socio–economic factors associated with credit disbursement and utilization by farmers, in Oyo State, Nigeria. A systematic random sampling technique was used to select 130 beneficiaries and 130 non beneficiaries from the Bank of Agriculture Mobile Credit Officers at the Zonal Headquarter of the Bank, in the State Capital, Ibadan. Data were collected through structured questionnaire and analyzed using frequency counts, percentage, Chi-Square and Pearson Product Moment Correlation (PPMC). The result showed that majority (50.0%) of the beneficiaries and non–beneficiaries (52.3%) were within the age bracket of 41 – 50 years. In addition, majority (93.5%) of the farmers were married with children, while (88.5%) of them were males. Beneficiaries (17.7%) were more literate than the non – beneficiaries (5.4%). More than one – half (60.0%) of the farmers had arable crop farming as their primary occupation, with a farm size of 6-10 hectares. The result further showed that (58.4%) of the farmers relied on Bank of Agricultural Credit Scheme, despite the fact that only a few of them (2.3%)benefited from the loan 4 -5 times. Also (52.3%) of the beneficiaries and (35.4%) of the non -beneficiaries utilized the loan to hired labour and for weeding. Socio – economic characteristics such as age (?² = 2.52, P > 0.05),and sex (?² = 3.84, P > 0.05), had no significant effect on credit utilization. However, secondary occupation (r = 13.04),and sources of labour (r = 17.4) markedly influence the utilization of credit by the farmers. The study recommends that, the loan should be granted to the real farmers, and more females should be included in the future credit scheme.