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Research Article Open access CC BY 3.0

Credit Constraints: Its Existence and Determinants among Poultry (Egg) Farmers in Nigeria

O. I. Afolabi, D. A. Adegbite, S. O. Akinbode, O. F. Ashaolu, A. M. Shittu

Journal of Economics, Management and Trade · pp. 1834–1848 · Published 24 Jul 2014

10.9734/BJEMT/2014/10018

Abstract

Access to productive resources at the level sufficient for economic and scale efficiencies by farmers is constrained by limited resource endowment and poor access to farm credit. This study examined the existence and determinants of credit constraint on poultry egg farmers in Nigeria. Primary data were collected from 120 farmers drawn by a multi-stage sampling technique. Descriptive statistics, Probit regression and Test of Difference of Means were used to analyze the data. The study revealed that 90% of the respondents were male, 77.5% were married with 95% being literate. The mean age and years of experience were 43 years and 8.7 years respectively. High transaction cost of loans (56.7%), fear of losing asset (35.8%), and credit rationing by banks (65%) were conditions determining the credit constraint status of farmers. The findings further showed that age (p<0.05), marital status (p<0.1) and years of experience (p<0.01) of the farmer significantly affect the credit constraint status of the farmer. There is significant difference between the gross margin of credit constrained and unconstrained farms (α=0.01). This study recommends that farmers should join or form cooperative societies in order to enhance credit accessibility. Increasing and channelling credit support through cooperative societies will enable farmers to increase their flock size which will invariably increase their profitability and efficiency.  

Credit constraints poultry (Egg) farming production efficiency

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