ABSTRACT

The study was on access to formal and informal rural banking credit on agribusiness investors in Ahiazu Mbaise local Government Area of Imo State. The work sets out to solve the problem of low access to rural banking credit and its implication on agribusiness loan policy in the country. A random sample of 80 agribusiness investors was chosen for the study. Well structured questionnaire was used for data collection. Data -analysis was done using frequency distribution, percentages and regression analysis. The overall objective of this study is to examine access to formal and informal rural banking credit by agribusiness investors in Ahiazu Mbaise. 70 % of the investors were involved in crop production, while 17.50% were involved in livestock production and marketing /trading respectively, 6.25% and 5% were involved in baking and processing and 51% of the investors had savings. Credit access and demand level was relatively high. More so, the income of the respondents with access to rural banking credit were low.. The analysis of factors affecting the extent of access to formal and informal rural banking credit revealed that Input cost, collateral, education and output were 4 significant factors influencing the extent of access to formal rural banking credit while education, collateral, output and amount saved where significant I factors influencing access to informal rural banking credit. The empirical analysis of credit demand function showed that collateral, input cost, output, age, interest rate and education were factors influencing the demand for rural banking credit. The study shows that majority of the respondents were married, literate and had a moderate family size with personal income as major source of finance. More so, majority of the agribusiness investors were farmers (crop producers) and were middle aged. A flexible monetary and fiscal measure should be put in place to stimulate investment in the agribusiness sector with respect to interest rate and establishment of more rural bank branches. Government should reduce the level of input cost through subsidies and removal of tariffs on agribusiness inputs.