ABSTRACT

 This study has been designed to analyze the effect of credit use by farmers in Isiala Ngwa North Local Government Area, Abia State, Nigeria. Primary data from a purposive multistage sampling of eight communities was chosen with a random selection of two (2) villages from each of the communities giving a total of sixteen (16) villages. Four (4) farmers were chosen from each of those villages giving a total of sixty four (64) respondents. Data analysis was by linear regression model where four functional forms of 100 linear, double log, semi log and exponential were tried. The result revealed that majority (85.9%J of the farmers were males while the minority ( 14 .1%) of the farmers were females with an average age of 44 .3 years. The farmers spent an average of 11.4 years in formal schools, while they had a mean household size averaged 5.3 persons. In marital status, married farmers recorded highest number (87.5%) followed by single farmers (7 .8%), widowed (3.1%) while separated recorded the lowest ( 1.6%) four variables were significant. They are cost of labour (positively related) 5%, cost of other inputs (positively related) 1%, amount of credit (positively related) 10% while interest rate gave a negative coefficient of 5%. The major constraints encountered by farmers in the area were delay in accessing credit, short duration of credit, low volume of credit, collateral, high interest amount and credit renewal. Based on these findings, it is recommended that farmers should be provided with adequate credit facilities with reduced interest rate while farmers should increase the efficiency of household labour to reduce cost of labour and enhance output in the area.