AGRICULTURAL CREDIT UTILIZATION AMONG BENEFICIARIES OF DEVELOPMENT EXCHANGE CENTRE IN TAFAWA BALEWA LOCAL GOVERNMENT AREA OF BAUCHI STATE, NIGERIA

Abstract

The study examined agricultural loan utilization among borrowers of Development Exchange Centre (DEC) in Tafawa Balewa Local Government Area of Bauchi State, Nigeria. Data were collected from 47 randomly selected respondents through the instrument of questionnaire and analyzed using descriptive statistics, Access to Credit Index, t-test, and regression analysis. The results showed that beneficiaries had fair access to credit index of 0.46 having received an average loan amount of N31, 500 being 46.1% of the loan applications T-test however, revealed a significant diversion of the granted amount at 0.5%, implying that borrowers diverted some of the funds to non-agricultural use. It was found out that crop production beneficiaries utilized the loan on fertilizer, labour, farm assets, storage bags, agrochemicals and seed or seedlings; and animal production beneficiaries used the loan for stocking, feed, labour, drugs and livestock equipment. Regression results of the factors affecting loan utilization showed that age, household size, non-farm income source, educational level and farming experience were significant (P<0.05).  It was concluded that farmers did not make the best use of the loan amount acquired; perhaps due to inadequate loan supervision. It was therefore, recommended that while more should be given in terms of loan volume to farmers, it should be followed by intense supervision as it was found to correlate positively with loan utilization.