ABSTRACT

The study examined the effect of micro-credit on the welfare of small scale farmers in Akwa Ibom State, Nigeria, using a structured questionnaire. Primary data were collected from a I sample of seventy two (72) farmers comprising forty-four (44) beneficiaries and twentyeight (28) non-beneficiaries of Akwa Ibom State micro-credit scheme. Data collected were analysed using statistical tools such as: frequencies, percentages, averages, regression and probit analyses and test of difference between means. The result of data analysis showed that the mean age of the farmers was 45year5 for beneficiaries and 46 years for non beneficiaries, implying that, majority of them are energetic and still able to do farm work. The mean household size was 8 persons showing a large household size, implying that the households have a ready source of abundant labour. The mean farming experience is 14 years for beneficiaries and 15 years for non beneficiaries showing that most of the farmers were highly experienced and as such can efficiently manage resources. Furthermore, 97.72% and 96.42% of the beneficiaries and non beneficiaries respectively acquired one form of education or the other, implying that most of the farmers were educated. T-test result showed that there is difference between mean volumes of loan demanded and mean volume of loan granted. Probit analysis was used to investigate factors influencing participation in the micro credit scheme. The result showed that, household size, region of residence and age of household heads affected participation positively, while educational level of household heads and assets affect participation negatively. The results of the estimation of the farmers' welfare using welfare function showed that: income, household size, region of residence, educational level of household heads and micro credit significantly influenced welfare positively. Delay in release of loan, insufficient loan sum, irregularity of loan, politicizing loan allocation, and high cost of processing loans constituted set backs on the effect of micro credit on farmers welfare. T-test was used to examine whether or not there is a difference in the mean welfare status of farmers with micro-credit and those without. The outcome showed that, there is a difference in the mean welfare of farmers with micro-credit and those without. Based on the results, it is recommended that loan should be released on time and given on regular basis to genuine farmers since agricultural operations are time bound.