CONSTRAINTS TO FARMERS’ ACCESS, UTILIZATION AND REPAYMENT OF BANK OF AGRICULTURE’S LOAN IN NORTH CENTRAL, NIGERIA

Abstract

The study analyzed the factors constraining the ease of access, utilization and repayment of agricultural credit of the Bank of Agriculture to farmers in North Central, Nigeria. Multi-stage sampling procedure was used to sample a total of 202 beneficiary farmers of BOA credit in the region. Primary data were elicited from the farmers with the aid of structured questionnaire that was complemented with interview schedule. Data analysis was done with descriptive statistics and principal component model. The result revealed that six (6) factors constitute the major constraints adversely affecting farmers’ access and utilization of BOA loans and they include bank structure and interest rates (10.8%), risks (9.5%), perception and poor loan administration (9.5%), integrity (7.8%), profitability (7.8%) and collateral constraint (7.7%) which explained a total of 53.2% of the variance in the 17 constraining variable components. The study concluded that these factors pose great threat to financing agricultural sector by formal institutions and consequently affecting agricultural productivity of the farmers in the region. It therefore calls for urgent intervention and remedy by all the relevant stakeholders. The study recommended that the procedures for the agricultural loan applications, approval and disbursement should be emendated to aid farmers’ ease of access of the loan and its optimal utilization which conveniently enhances the repayment. It was further recommended that the Bank embrace technology to make up for its poor spread and reach across the country.