EFFECT OF LOAN UTILIZATION ON OUTPUT OF CASSAVA FARMERS IN IMO STATE, NIGERIA

Abstract

The study analyzed the effect of loan utilization on the output of cassava farmers in Imo State, Nigeria. Specifically, it identified the sources of loans available to farmers, estimated the extent of agricultural loan utilization by cassava farmers, determined the effect of socio-economic factors on loan utilization among the cassava farmers, and determined the relationship between loan utilization and cassava output in the area. Multistage random sampling technique was utilized in selecting two hundred and twenty-eight cassava farmers used for the study. Data were obtained with the aid of a structured interview schedule and analyzed with the aid of descriptive and inferential statistics, such as percentage, mean, student t-test, and multiple regression model. The results showed that the predominant source of loans among respondents was farmers’ cooperatives (41.3%). Multiple regression analysis revealed that annual income, farm output, and membership of cooperatives with coefficients -1.794, 0.003, and -0.302 respectively, were significant factors that influenced farmers' loan utilization. The findings revealed that there was a significant difference between the output of farmers who fully utilized the loan and those who partially utilized the loan, with t = -18.43, p<0.01. The study recommended that efforts be made to make farmers benefit from formal agricultural loans, while credit institutions should set up supervisory agencies that would monitor farmers’ activities to ensure effective and judicious utilization of such loans.