ABSTRACT

The study was designed to examine gender, informal credit markets and determinants of credit use by food crop farmers in Akwa Ibom State of Nigeria. A multi-stage sampling technique was adopted in selecting 96 credit user arable crop farmers and 24 informal credit sources from 6 villages through the use of structured questionnaire. A total of 120 respondents selected were used for the study. The socio-economic characteristics of food crop farmers and informal credit suppliers were described using descriptive statistical tools such as percentages, means and frequencies. The profit model was used to examine the factors that had significant influence on credit use and credit delinquency. The Poisson regression model was used to examine the factors affecting the frequency of credit disbursed to food crop farmers. Finally the simultaneous equation technique, using two stage least squares was employed to examine the determinants of credit supply and demand in the area. Separate treatment of male and female farmers served to identify the similarities and differences between the gender concerning the determinants for credit demand, use and delinquency, and also the determinants of supply and number of credit disbursed. Results of data analyses revealed that the factors that significantly influence credit use by male farmers are credit amount received, farm income and education and profit. While factors that have significant influence on credit use by female farmers are farm income, profit, education household size and interest amount. Poisson regression analyses showed that liquidity, experience in lending and availability of surety influenced frequency of credit given to male farmers whereas liquidity, experience in lending and surety influenced frequency of credit given to female farmers. The significant determinants of credit delinquency for the male farmers were farm income, profit, education and interest amount, whereas credit amount received, profit, household size and interest amount had significant influence on delinquencies in females. Further, the simultaneous equation analysis revealed that, farm income, profit, education, interest amount, determined demand a whereas liquidity, experience in lending and interest amount determined supply. It was concluded that factors that influence informal credit demand, use and delinquency differ by gender. Male and female needs and priorities vary and evolve over time just as the factors influencing their demand, use and delinquency on credit vary as well as factors that make them credit constrained. Informal credit suppliers should realize these changing realities when designing and delivering credit to male and female food crop farmers. Government should put in place a body that will help check diversion of credit meant for farm use. A body that will monitor and regulate prevailing high interest rates in the informal credit market should be constituted. Government should ensure the presence of formal lending institutions in the rural areas so that food crop farmers can access cheaper credit. This will go a long way in improving food crop market and agricultural production in general.