African Journal of
Agricultural Research

  • Abbreviation: Afr. J. Agric. Res.
  • Language: English
  • ISSN: 1991-637X
  • DOI: 10.5897/AJAR
  • Start Year: 2006
  • Published Articles: 6688

Full Length Research Paper

An analysis of farmers’ access to formal credit in the rural areas of Nigeria

Saifullahi Sani Ibrahim1* and Haruna Mohammed Aliero2
  1Department of Economics, Isa Kaita College of Education, Dutsin-ma, Katsina State, Nigeria. 2Department of Economics, Faculty of Social Sciences, Usmanu Danfodiyo University, Sokoto, Nigeria.
Email: [email protected]

  •  Accepted: 31 October 2012
  •  Published: 31 December 2012



This study examines the factors that influence farmers access to formal banking credit in the rural areas of Nigeria. The data used was collected from rural areas of Katsina State. This study used probit modelling approach to analyse the factors that influence farmers’ accessibility to formal credit. This study found that the level of income, collateral, educational attainment and marital status have significant positive influence on farmers’ access to formal credit, while age and sex have insignificant positive influence on the farmers’ access to credit. On the other hand, interest rate and transaction cost have significant negative influence on the farmers’ access to formal credit. Thus, this paper concluded that with the prevailing banking arrangement in Nigeria, rural farmers have little or no access to credit from conventional banks. Therefore, the study recommended the use of both group lending arrangement and character lending, so that farmers in the rural areas could be reached with formal credit.


Key words: Rural farmers’ access to credit, rural finance, Agricultural financing determinants.