Original scientific paper

Effect of Microcredit on Investment Decision of Smallholder Farmers in Osun State

Adetomiwa Kolapo ; Department of Agricultural Economics, Faculty of Agriculture, Obafemi Awolowo University, Nigeria
Ayodeji Sunday Ogunleye orcid.org/0000-0003-0193-027X ; Department of Agricultural Economics, Faculty of Agriculture, Obafemi Awolowo University, Nigeria
Ayodeji Damilola Kehinde ; Department of Agricultural Economics, Faculty of Agriculture, Obafemi Awolowo University, Nigeria
Williams Odimgbe-James ; Department of Agricultural Economics, Faculty of Agriculture, Obafemi Awolowo University, Nigeria

Abstract

In this study, we used a cross sectional data from a survey conducted in Osun State, Nigeria to assess smallholder farmers’ access to microcredit and its influence on the investment decision. We used probit regression model to estimate the factors influencing access to microcredit by the smallholder farmers and OLS model to estimate the effect of microcredit on farmers’ investment amount. The result of the probit model regression showed that source of credit, level of education and membership in farmers’ association had significant and positive influence on access to credit. The ordinary least squares regression result also showed that age, interest on investment and access to credit had a significant and positive influence on farmers’ farm investment. We recommend that financial institution should re-strategize and develop a working model that will make disbursement of loan to farmers easy and timely so that they will be able to utilize the loan for intended purpose.

Keywords

microcredit, investment, smallholder, farmers, Osun, Nigeria

Hrčak ID:

274551

URI

https://hrcak.srce.hr/274551

Publication date:

29.3.2022.

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