The demand for credit and its impact on the productivity of poultry enterprise in Cross River State, Nigeria

Master's Thesis from the year 2008 in the subject Agrarian Studies, University of Ibadan, course: Agricultural Economics, language: English, abstract: The demand for credit and its impact on the productivity of poultry enterprise was investigated in Cross River State. The Multinomial logit model was used to determine the factors affecting farmers demand and participation in credit market, be it formal or informal, or both institutions. Descriptive statistics was carried out for the socio-economic and enterprise characteristic, while the impact of the use of credit on the productivity of the farmers was ascertained using the Cobb-Douglas stochastic frontier production function. Analyses of results from data collated through well structured questionnaires indicated that the factors that affects farmers credit demand and choice includes, socio-economic and enterprise characteristics, indicators from the credit history of the farmer, as well as institutional or policy-based characteristics.

Socio-economic and enterprise characteristics such as educational level, gender, farm capacity, and household asset were significant factors that influenced participant choice of credit institution in the study area. Poultry training was also found to be statistically significant. The positive sign associated with training indicates the importance of an increase in the training level of poultry farmers. Again, farmers with high likelihood to economics of scale and increase output have high probability to borrow from credit institution. Interest rate was also found to have negative relationship to participation in all markets. Other institutional factors that were significant were more favourable terms and easier to get a loan. While farmers who had once benefited (i.e. had outstanding loan) significantly contributed to participation decision.

Credit access and use was found to have significantly impacted on the productivity of the farmers in terms of efficiency. The mean efficiency was found to be 0.58.

From the results of the research, the following policy recommendations are made:
Training and workshop programme especially in areas of production, farm risk management, marketing and litter management should be organize by government and corporate financial institutions to encourage participation in credit market such that the huge fund deposit seeking to be invested can be efficiently utilizes in the production process.