;

AN EVALUATION OF ACCESS TO AND UTILIZATION PATTERNS OF FUNDS FROM MICRO-FINANCE INSTITUTIONS BY FARMERS IN UDI LGA

By

Abstract

This study investigated the access to and utilization patterns of funds from Micro-Finance Institutions by Farmers in Udi Local Government Area, Enugu State. It assessed the terms and cost of accessing and the pattern of utilizing micro-credit facilities by farmers. The study also examined the socio-economic characteristics of the borrower and factors affecting them. Due to the large number of subjects investigated, the study adopted the survey research method as its research design. A total of 73 farmers constituted our sample size out of which 40 were selected for the study. Variables of interest were farmers' socioeconomic characteristics, variations between amount applied for, amount approved and received as well as the utilization pattern of micro credit facilities. Probit regression analysis was used for the study. Key findings show that 78.5% of loan recipients were male and only 10.5% had informal education. On utilization pattern, 13.5% of the respondents are into crop farming, 16.2% engaged in livestock production while 21.6% practice both crop and livestock production. We applied Chi-Square statistical test in testing the formulated hypotheses. The Chi-Square estimate of 22.520 is highly significant and this support the first hypothesis which postulate that access to credit by farmers is positively influenced by their higher values in terms of educational level, farm size, experience, extension contact and farm income. It was also established that gender is not a barrier to accessing credit facilities. Finally, the negative coefficient of membership of co-operatives (-0.0339) indicates that against our expectations, non-members of co-operatives have probability of accessing credit. In the light of the above, this study recommends the implementation of a loan increment policy to farmers as well as increased capacity development for loan borrowers.