INFLUENCE OF FORMAL MICRO-CREDIT ON THE SOCIO-ECONOMIC WELFARE OF FARMERS IN EBONYI STATE, NIGERIA

This study analysed the influence of formal micro-credit on the socio-economic welfare of smallholder farmers in Ebonyi State, Nigeria.  A total of 180 farm households were randomly selected from 12 autonomous communities.  Structured questionnaire and interview schedules were the major instruments used for data collection.  Data collected was analysed using both descriptive and inferential statistics.  Descriptive statistics such as the mean, tables, percentages, etc and inferential statistics such as logit test and regression analysis were used for the specific objectives.  A logit econometric model was used to quantify and analyse the data obtained on factors that influence farmers’ access to formal micro credit.  The result of the analyses showed that variables like annual income, marital status and farmers’ main occupation influenced their access to formal micro credit and were significant at 5% level of significant. It was equally observed that the amount of formal micro credit obtained was positively and significantly correlated with annual farm income.  It also observed that 41% of the borrowers had tangible assets that valued higher than N150,000.00 when compared to non-borrowers who were only 5%.  The major constraints identified were mandatory minimum savings; late release of funds; inability to provide CBN guarantee certificate and lack of security/collateral.  It was recommended that government in collaboration with private individuals should establish a wider network of microfinance banks to serve for the specific credit needs of the farmers.