ABSTRACT

The study examines the determinants of credit demand among rural farmers in Ikot Abasi Local Government Area, Akwa Ibom State. The specific objectives were to determine the socio-economic characteristics of small holder farmers, identify the various types of credit engaged by farmers, identify the sources of credit available to farmers, identify factors that determine credit demand among rural farmers, identify the problems farmers encounter in credit acquisition. A random sample of 40 farmers was chosen from the area of study. Questionnaires were used for data collection. Data analysis was done using mean, frequency distribution, percentages and regression analysis. The study shows that farmers in the study area were relatively young, energetic and literate. Farm sizes were small with mean of 0.6 hectare while household size was large. The farmers have low level of farm income and are experienced in farming indicating that they are likely to demand for credit. And their major sources of credit are the informal credit institutions. Farm income (5.070***), cost of input (2.337**) and farm experience (1.345*) were significant factors at 1%, 5% and 10% respectively that determine farmers' demand for credit. Among the problems encountered by farmers in credit acquisition were high interest rate, other lending policies and provision of collateral. Since farmers are making increasing use of purchased inputs and thereby incurring higher operating experiences policies that ensures reduction in the cost of inputs should he provided and implemented.