Impact of Microfinance on Smallholder Cassava and Rice Farms Productivity in Makurdi Metropolis, Benue State, Nigeria

Ogebe Ozoko Frank*, Ali Ayuba and Olagunju Ishaaqa Oladapo

Department of Agricultural Economics, Federal University of Agriculture, PMB 2373 Makurdi, Benue State, Nigeria.

*Corresponding Author’s Contact Details: Email address ✉: frankozoko@gmail.com; Phone No ☎: +234, 07035945500

Accepted October 14, 2020

The concept of microfinance lies in the belief that microfinance institutions could empower poor farmers through easy access to credits to increase their agricultural productivity and battle food poverty. Thus, this study was undertaken to investigate the impact of microfinance on agricultural productivity by smallholder farmers in Makurdi Metropolis of Benue State, Nigeria. Data were randomly collected from 120 farmers consisting of 60 Credit Beneficiaries (CB) and 60 Non-Credit Beneficiaries (NCB) using a well well-structured questionnaire which were analyzed through descriptive statistics and multiple regression analysis. The results of the regression analysis showed a positive impact of microfinance credit on agricultural productivity. Findings revealed that; the accessed credits help farmers to purchase inputs and improve farming technologies, which ultimately transformed into the higher productivity of the credit beneficiaries as CB farmers realized higher yields (52.1 bags) compared to the NCB farmers (24.6 bags). This is partly because the CB were relatively better in the use of inputs such as the adoption of improved seeds, use of fertilizers and affordability of hired labour which ultimately enhanced their farm productivity. The study concluded that though microfinance credits has a significant impact on agricultural productivity under smallholder farmers, access to microfinance credits by smallholder farmers in the study area is constrained by lack of microfinance credit information, high interest rates, and inadequate supply of credit institutions as well as risk-averse nature of some farmers. Thus, to enhance agricultural productivity and improve the well-being of smallholder farmers, it is recommended that smallholder farmers should be facilitated to form “Credits and Saving Cooperative Unions” (SACCOS) for collective responsibilities of accessing credits and paying loans.

Key words: Beneficiaries, Credits, Microfinance, Outputs, Productivity.

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