ANALYSIS OF CREDIT ACQUISITION AMONG RICE-BASED SMALL SCALE FAMERS IN EBONYI STATE, NIGERIA

Abstract

This study analyzed the factors affecting credit acquisition among rice-based Small and Medium Enterprises (SMEs) in Ebonyi State, Nigeria. The specific objectives were to; examine the socio-economic characteristic of Rice Based SMEs in the study area; determine the source and volume of credit acquired by Rice-Based SMEs; andanalyze the factors affecting credit acquisition among Rice-Based SMEs. Descriptive and inferential statistical analysis were used accordingly. Objectives one and two were analyzed using descriptive statistics such as percentage, frequency, pie chart; while objective three was analyzed using ordinary least square regression. A greater population of the respondents were male, with 53% of the population indicating that they were married. Less than half (45%) of the population had 6-10 years of experience, with a household size of 1-3 persons. The R² value of 0.734 implied that 73.4% changes in the amount of credit acquired by the rice based SMEs was accounted for by changes in the independent variables included in the model while the remaining 26.6% was accounted for by error. The result further showed that education, farm size and repayment period of the credit positively influenced the acquisition of credit by the Rice-Based SMEs, all at 1% level of significance; while household size, credit source and interest rate negatively influenced credit acquisition at 5, 10 and 5% levels of significance respectively. It was recommended that; Agricultural lending institutions should be strengthened while appropriate measures should be insured and sufficient fund be provided with minimal and bearable formalities, for the encouragement, motivation and improvement in Rise production. Government and other stakeholders’ efforts should be directed towards policies and programmes that will further enhance those factors that increase farmers’ decision to use agricultural credit.