Evaluation of Rural Credit Markets on Small Holder Farmers' Production and Income: (A Case of Ikwuano L.G.A. Abia State)

ABSTRACT

This study investigated the evaluation of rural credit markets in Ikwuano Local Government Area of Abia State. The study focused on the financial lending institutions (formal and informal) that lend money to farmers, the differences in the lending conditions and amount of loan granted between the identified sources. Also, the impact Of the loan on the beneficiaries

level of production and income. Data relevant to the study were collected through the use of both structured questionnaire and personal interview scheduled from farmers loan beneficiaries and the financial markets. Also information was gotten

from Abia State Ministry of Agriculture, research project, financial reports, feasibility reports and journals. A total of 120 farmers respondents were interviewed. The data collected were analysed by simple statistical techniques such as percentages and averages. The terability of the stated hypothesis were verified using correlation coefficient and chi-square.

The result revealed that lending institution in the study area are Nigeria Agricultural and Co-operative Bank (NACB), Co-operative Societies, Community Bank, namely; Umuariaga Community Bank and Commercial Bank

namely; United Bank for Africa. The informal sources include friends, relatives, Isusu, Age Grades and Money-lenders.

The result of the stUdy showed that loan had an impact on production and income level. However, the performance of the financial markets to the amount of lloan granted differs. The commercial bank showed the greatest neglect to agricultural financing, It was concluded from the findings that the credit improved agricultural production and the income of the farmer respondents. However, efforts should be concentrated by government towards improving their credit condition so as to increase the amount OP credit obtained by the farmers. The amount of credit given to farmers ihould be increased to enhance full execution of their farm operations. The farmers should form agricultural co-operative societies as a member to solve their financial needs. Finally, some government structures like the A.D.P. extension agent could be used as intermediaries between farmers and financial institutions to reduce administrative overhead of servicing the credit advances.