EFFECT OF MICROCREDIT ON AGRICULTURAL RISK MANAGEMENT STRATEGIES AMONG SMALL HOLDER FARMERS IN ABAKALIKI LOCAL GOVERNMENT AREA OF EBONYI STATE

The study analysed effect of micro credit on agricultural risk management strategies among small-holder farmers in Abakalilki Local Government Area of Ebonyi state. A multistage sampling was used to select 120 respondents used for the study. Data collected were from the primary source using structured questionnaire. Both descriptive and inferential statistics were used to analyse the data obtained. Based on the objectives of the study. The result obtained showed that males (65%) were more than females. The study further revealed that majority (60%) of the respondents were married with average household size of 9. The result also showed that the farmers were within their active age with an average age of 47 years, while majority had average experience of 20 years. The primary occupation shows that the respondents were mainly farmers (100%) but complemented their farming activities with secondary occupations such as trading. The study further revealed that majority of the farmers’ sourced credit from informal micro credit institutions such as isusu group (90%), and local lenders (73.3%). Also the result of types and sources of risk encountered by the farmers in agricultural production indicated loss of crops and animals to diseases and pests, flood, loss due to lack of storage facilities among others. The result of the simple regression showed R2 of 0.569, indicating that 56.9% of total variation in risk management strategies employed by the farmer was explained by the sources of micro-credit utilized. The test of hypothesis showed that there was significant relation between the sources of micro credit utilized and the risk management strategies applied by the farmers. The farmers identified the following as constraints to the use of micro credit in agricultural risk management. These are; lack of adequate finance, lack of required collaterals for agric loan, high cost of fertilizer among others. Based on this finding it is recommended the formation of cooperative society by the farmers to access micro-credit, introduction of farmer-friendly loan disbursement policy that will make loan procurement by farmer easier and less cumbersome and establishment of act for the operations of informal money lenders, since their operation is vital to micro-credit accessibility by farmers and loan delivery among small-holders farmer in the area.