Elaborated Study on Loan Size and Its Determinants as Critical Growth Factors for Rural Farmers in Imo State, Southeast Nigeria
In the Owerri Agricultural Zone of Imo State , Nigeria, this study examined the loan demand requirements of rural staple and poultry farmers. The factors influencing the size of loans were also examined. Data were collected using a stratified sampling technique using standardised and pre-tested questionnaires from 100 loan recipients and five financial institutions in the region in the course of this cross-sectional analysis. The study lasted for a six-month duration, effective April 2010. The Expect Value approach was used to determine their optimum loan requirement, while the multiple regression analysis methodology of OLS was used to determine factors influencing the beneficiaries’ loan size. The results showed that farm size, level of education, form of enterprise, experience of farmers and dependency ratio were the potent factors affecting loan size. Furthermore, the outcome showed that the respondents were highly constrained by money, as only 60% of their capital needs were met by financial institutions. N292, 315, and N435, 753 for Cassava and Yam growers, respectively, for a farm size of 0.80 hectares, were the optimum loan conditions set for growers. For poultry farmers of approximately 120 chickens, the estimated optimal credit requirement was N492, 500. These figures will serve as reference points for financial institutions in the credit management of similar status and area farmers. Financial institutions have been urged to consider offering start-up capital to young people and new graduates, who have obviously yet to become a company on the path to agriculture. On the other hand, the government was advised to provide financial institutions supporting agriculture with fiscal and monetary incentives in view of the delicate existence of farm sector. It is only discreet to notice that the same importance as protection should be given to food security, as it can cause internal and external imbalances in terms of food security. Price volatility, balance of payment deficits, danger of poverty , deprivation, social and political upheavals or conflicts as a result of large import bills. To restore normalcy and the lack of content In such a scenario, doubling the budgetary allocations for military defence may be necessary.
Author (s) Details
Professor S. U. O. Onyeagocha
Department of Agricultural Economics, Federal University of Technology, Owerri, Nigeria.
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