DETERMINANTS OF FINANCIAL INCLUSION OF AGRICULTURAL COOPERATIVE SOCIETIES IN YEWA DIVISION OF OGUN-STATE, NIGERIA

Abstract

The study examined the determinants of financial Inclusion of agricultural cooperative societies in Yewa Division of Ogun-State, Nigeria. Multi-stage sampling technique was utilized to select one hundred and fifty (150) cooperative societies for the study. The result shows that majority (70.67%) of the respondents, did not access credit from either formal or informal financial institutions during the period under review. The result reveals that formal institutions the participants patronized to include Microfinance Banks (8.67%), Government schemes and programmes (7.33%), Commercial banks (2.67%) and Bank of Agriculture (BOA) (1.33%). The informal institutions patronized were Thrift/Credit cooperatives (4%), money lenders (3.33%) and self-financing (2%). The average amount collected was N705,620.45 and N21,765.70 for formal and informal institutions respectively. The binary regression model reveals that, distance to credit source, government interference, repayment period, collateral, financial literacy, transaction cost, hidden charges, savings, year of existence, shareholdings and account officer accounted for 67% variation in cooperative society’s access to formal credit in the study area. The constraint faced by includes sociological accounted for 15.41% of the variance of the factors militating the performance realization of cooperative societies, the second factor (economical), accounted for 15.3% of the variances, the third factor (organizational/institutional), accounted for 14.72% of the variance militating the optimum performance of agricultural cooperative societies in the study area. The three factors explained 45.43% of the variances militating against farmers’ cooperative performance. Accessibility to credit from financial institutions (formal and informal) showed that the respondents were financially excluded from all the financial markets as the majority never had access to either of the financial institutions. The study therefore recommends that there is need to encourage and enlighten the members on good governance, members’ commitment/participation (financially and advices) and government support to achieve their objectives.