Socio-economic Determinants of Arable Crop Farmers’ Participation in Formal Financial Services in Umuahia Agricultural Zone of Abia State, Nigeria

Abstract

The study analyzed socio-economic determinants of arable crop farmers’ participation in formal financial services in Umuahia Agricultural Zone of Abia State, Nigeria. Specifically, the study identified formal financial services in relation to the farmers’ participation; estimated the determinants of farmers’ participation in formal financial services and examined the constraints to participation in formal financial services by the farmers. A multi-stage sampling procedure was used in the selection of 80 respondents for the study.  Data were obtained from primary source through structured questionnaires administered to the arable crop farmers. Data were analyzed using descriptive statistics such as frequency counts, mean scores, percentages and multiple regression analysis. Age (1.0%), household size (1.0%), and education (1.0%) positively affect crop farmer’s participation in formal financial services while farm proximity to formal financial institution (1.0%) had negative relationship with arable crops farmer’s probability of participating in formal financial services in the study area. Majority of the farmers were constrained by distance to formal financial institutions ( = 3.53).  The study recommends improvement on farmers’ financial literacy through extension agents’ trainings since education is related to access to formal financial services.

Keywords: Determinants, Arable Crop Farmers, Formal Financial Services, Accessibility