ABSTRACT

The study analyzed the demand and access to credit among Small and Medium Scale agribusiness enterprise in Abia State, Nigeria. Multi-stage random sampling techniques were employed to select 120 respondents in the state. Primary data were collected with the use of well-structured questionnaire through the aid of enumerators. Relevant descriptive and inferential statistics such as frequencies, percentages, means and standard deviation. Hackman double hurdle model regression were used for data analysis. The results showed that a good proportion (52.50%) of the agribusiness small and medium scale operators in the study area were male with mean ages of 50years. Majority of the respondents were married (63.33%), while about (96.7%) were literate having acquired one level of education or the other. On average, the agribusiness operators have spent about 19 years in business. About 68.3% of them belong to cooperative society. The mean income of the respondents were N201,666.67 for an average small and medium scale operator. The results showed that the respondents obtained their credit from both formal and informal sources, with majority (53.33%) from informal sources, (46.67%) were from formal source. Also, majority (90.83%) demanded for short-time credit, while the mean and standard deviation of credit demanded were N199,916.67 and N103,601.10 respectively for an average small and medium scale operators. The Hackman double stage model showed that interest amount, years of education, experience, enterprise’ age, income and membership of association of the agribusiness operators were significant determinants of volume of credit. Result on performance of the agribusiness small and medium scale enterprises showed a total revenue and net profit were N201,166.67 and N35,814.54. Furthermore, simple linear regression model on effect of demand of credit on performance of small and medium enterprises showed there was a positive relationship between performance and credit access. Also result further showed that major constraints of credit access were burdensome collateral (X=4.10), instability in government policy (X=4.02) and long protocols (X=3.95). The study therefore recommend that policy should also focus on ways to attract and encourage not only experienced but younger people willing in agribusiness small and medium scale enterprises, who are agile and strong in business drive through of credit to them, this group of operators would be able to put in a lot effort at raising the current level of performance.