ABSTRACT

The study was designed to examine the determinants of credit demand and micro finance outreach to farmers in Abia State: a case study of National Special Programme on Food Security. It specifically looked at the soclo-economic characteristics of the households involved in the micro finance Programme, ascertaining the eligibility criteria adopted by NSPFS in granting credit to Clients, analyzing the factors determining household demand for micro credit outreach level, sustainability achieved by the Programme, the factors influencing loan repayment among the Programme beneficiaries. Primary and secondary data were used in this study Primary data was  obtained from 120 respondents who were randomly selected from the three National Special Programme on Food Security sites in the three (3) Agricultural zones. Well- structured questionnaire were collected from the respondents, while the secondary data verse collected from documentations of the NSPFS. Data analyses were carried out with the use of such statistical and econometric tools like frequency, tables, percentages and multiple regression. The results of data analyses show that the mean age of the beneficiaries and non-beneficiaries was 49 years, indicating that they afë middle aged. There are more male loan béfiéficiaris than females in the Programme. majority of the respondents were smallholder farmers, married and literate. The eligibility criteria used in selecting beneficiaries were membership of  Societies, ability to adopt scientific packages of the Programme and being a farmer residing at NSPFS Sites. Level of Education of the household head, skills in off farm activities, farm size and loan transaction costs were significant variables influencing demand for micro credit. The outreach level and participation density of NSPFS in the State was low with 0.052 percent and a ratio of 0.00031 respectively. Furthermore, the Staff productivity was 32.4 with an average staff member of NSPFS in the State managing 701024.25. NSPFS micro-credit scheme is not self financially sustaining without Government subsidy or grants as indicated by subsidy Dependence Index (SDI) of 1.45 for the three- year period in the State. Loan repayment rate by beneficiaries for the three-year period was 31.02 percent indicating that the prngramme has a low repayment performance. More so, duration for loan repayment, transaction costs, experience and level of education were significant factors influencing loan repayment among NSPFS beneficiaries. In view of these, it is recommended that the programme should maintain the existing collaboration between it and Cooperatives/Farmers Associations for administration and supervision of credit at sites so as to reduce the loan transaction costs. This measure would reduce the high incidence of loan default in the programme and ensure a continued supply of credit that would meet clients' financial needs. Government should subsidize the prices of agrochemicals used by beneficiaries. This would increase the demand for agrochemical by beneficiaries and subsequently boost food production in the State. Government should increase the level of funding to the programme. This would ensure the sustainability of the programme in the state. For a better outreach to be achieved target population should be encourage through awareness creation to join Co-operative Societies and to adopt the technologies recommended to farmers by the programme.