The Effect of Agricultural Credit on Agricultural Productivity in Bichi Local Government Area, Kano State, Nigeria

Abstract

This study was set out to investigate the impact of agricultural credit on farm productivity in Bichi Local Government, Kano State, Nigeria. The major objective of the study was to establish the effect of access to credit on agricultural productivity in Bichi, Kano State, Nigeria. The study used a sample size of 359 respondents. OLS regression was used to determine the effect of agricultural credit on farm productivity. The study revealed that credit access had a significant effect on agricultural productivity. The study concluded that credit access improves production however accessibility to credit is limited by high interest rates and lack of collateral security. The study recommended the need for the government to increase access to agricultural credit by farmers who do not have collateral security to present to commercial banks. This would be achieved by the government providing commercial banks with venture capital which allows farmers to borrow at subsidized rates. Furthermore, the government should encourage farmers to form cooperative unions so that they can be able to access credit from financial institutions without necessarily providing collateral security.