ABSTRACT

Micro credit must be made more operational and effective in this country since the bulk of the farmers are rural based small scale agriculturalists that lack access to the regular institutional sources of finance. This study examined the effect of micro credit on the income of small scale farmers in Umuahia South Local Government of Abia State. A multistage random sampling tecimique was adopted to select 60 farmers which represent the sample size. A well structured questionnaire was used to collect information from the respondents. The data collected were analyzed using both descriptive such as percentage, mean and inferential statistics such logistic regression model. The results of the socio-economic characteristics revealed that majority (3 3.3%) of the farming household were within the age of 25-3 5 year. In term of sex there were more male than females in study area. All (100%) of the respondents have formal education. On average the farming household has spent about 12 years in farming. The Farmers in the study area have the mean household of 3.09 persons. The result also shows that overwhelming majority farmers had had above 1.0 hectare of land under cultivation. Econometric analysis from the logistic regression model shows that coefficient of variables relating to farm size (X1), age(X2) Experience (X3), labour (X4), capital (depreciation on equipment and facilities) (X5), were the significant variable that influenced the output of farmers. The Z-test shows that there was no significant difference between farmers using credit and those not using credit. The study recommends effective targeting of farmers are enlighten on proper utilization of credit to increase output. Socio economic infrastructure should be provided to reduce the cost of operation.