RURAL CROP FARMERS AND ACCESS TO FINANCIAL SERVICES IN IMO STATE

Abstract

There is a global consensus that the modern society is experiencing tremendous food crisis Achieving food security has therefore been one of the cardinal issues in recent times. Efforts are continually being made to combat the food problem in recent times. In Nigeria such efforts include the establishment of various agricultural credit schemes to make additional credit available to farmers. In spite of these establishments, a large number of farmers in Imo State are still entrapped in subsistence farming due to financial constraints. This paper therefore examined the various sources of capital used by farmers in Imo State and the constraints faced by farmers in accessing formal credit facilities. It also examined the differences in the quantity of food crops produced between farmers who accessed external capital and those who used personal savings to farm. The study adopted survey research design. The main instrument for data collection was questionnaire. A proportionate random sampling was used to select the study locations. Finally a purposive sampling technique was used to select the respondents. 648 copies of questionnaire were distributed. At the end a total
of 519 copies of the questionnaire were returned. This therefore formed the sample size. Data analysis involved descriptive statistics for objectives i, and ii, while t-test statistical model was used to test the hypothesis. The study revealed that the most available source of capital was personal savings, closely followed by Isusu (local thrift). Among the constraints faced by farmers in access to formal credit facilities, non availability of credit facility accounted for the highest while lack of collateral was identified as the second highest constraint. It was also found that there was no significant difference in the quantity of food crop produced between farmers who accessed additional credit and those who used personal savings. This was probably because majority of the additional credits came from informal sources whose operating capacity is usually low. It was therefore recommended among others that: the number of finance lending institutions should be increased in rural areas and be made more accessible to local farmers by making the type of collateral optional and more affordable. Government and cooperate organizations should partner with the informal credit institutions in order to improve their lending capacities.