Assessment of Informal Credit in Mobilizing Funds for Agricultural Production in Ijumu Local Government Area of Kogi State, Nigeria

Abstract

The study assessed the use of informal credit in mobilizing funds for agricultural production in Ijumu Local Government Area of Kogi State, Nigeria. A multistage random sampling technique was used to select 120 respondents for the study. Descriptive statistics and mean score were used to analyze the data collected. The result showed that 63.3 percent of the sampled respondents were literate with an average farm size of 1.5 hectares. The major source of informal credit available in the area was ‘Esusu’. The result also showed that 64.2 percent of the respondents demanded for N 30,000 and below from informal source of credit while 21.3 percent of the available loan was invested on agriculture. The average loan volume per respondent recorded in the study area was N 23,080.00. Amount of credit obtained from informal source of credit, farming experience, educational status, household size and non farm income significantly influenced agricultural production in the study area. High interest rate, low lending level, inadequate number of financial agents and mode of payment were the major constraints militating against the use of informal credit. The study recommended that there should be an increase in the amount of loan per beneficiary to take care of both the production and consumption needs of the farmers.