AKSU Journal of Agricultural Economics, Extension and Rural Development
ISSN(Online): 2736-0040 ISSN(Print): 2695-1975
ISSN(Online): 2736-0040 ISSN(Print): 2695-1975
Abstract
The study specifically analyzed factors influencing arable farm-households’ participation in microcredit market and their level of access to microcredit in Akwa Ibom State Nigeria. Multi-stage sampling technique was employed to obtain cross sectional data from 240 respondents. Descriptive statistics were used to describe respondents’ socioeconomic profile. Hecman two-stage model was used to examine the determinants of households’ participation in microcredit market and level of access to microcredit. Findings showed that transaction cost, distance to lending bank, number of guarantors and road condition were all negative and significantly related to micro credit participation at 10 percent level of probability, qualifying account relationship period, number of visits to lending bank and number of hours spent in financial institution also had significant negative relationship with market participation at 5 percent level of probability while gender was significant at 10 percent level of probability and positively related to market participation. Interest cost and transaction cost were significant at 1% and negatively related to households’ access to microcredit; while annual income and moratorium period had positive and negative significant relationship with access to microcredit respectively at 10 percent level of probability Policies that are aimed at ensuring the proliferation of pro-poor financial institutions in rural areas and reduction in qualifying account relationship period are advocated to encourage participation in microcredit market. To ensure increase in the level of access to microcredit, an enabling economic environment should be provided for farm-households to make adequate money needed to surmount the hurdle of having the required minimum account balance to qualify for higher microcredit sum.