Effects Of Commercial Bank Credit In Financing Agricultural Cooperative Farmers In Abia State, Nigeria

ABSTRACT

This study examined the effects of commercial bank credit in financing cooperative farmers in Abia State, Nigeria. Purposive sampling technique was used in selecting 80 respondents who are registered cooperative fanners in the study area. Data were collected from the respondents through a structured questionnaire on all the objectives of the study. Both descriptive and inferential statistics were used in analyzing the objectives and hypotheses of this study. The result showed that the majority (63.8%) of the respondents were male, they had mean age of 40.7 years, 63.5% were married, 42.5% had tertiary education, they also had a mean of 8.4 years farming experience and 66.2% had extension contact once a month. The sources of the fund/finance of the cooperative farmers were personal income representing (73.3%), friends/relatives and neighbors (16.3%), money lenders (28.8%), commercial banks (52.5%) and agricultural banks (73.8%). Majority of the respondents (51 .3%) had moderate access to commercial bank credit. Regression estimates of the determinants and effects of commercial bank credit on output of cooperative farmers showed that the coefficients of age (1%), education (1%), farming experience (5%), income (1%), farm size (10%) and credit (10%) were statistically significant. The F-ratio was equally significant at 1 % showing the models goodness of fit. Furthermore, the perceived challenges of the cooperative farmers were poor information on bank credit ( 4.0), government policy ( 3.6), lack of access to loan ( = 3.5), attitude of the farmers ( = 3.2), bank policy (x = 3.6), interest rate ( 3.6) and collateral ( = 4.2). The study concluded that efficient use of commercial bank credit will enhance the cooperative farmers output. Adequate information on bank credit, favorable government policy, reduced interest rate, flexible bank policy and increased agricultural loan portfolios among other things were recommended to enhance farmers' access to commercial bank credit.