Abstract

This study examined the effect of interest rates on access to agro-credit by farmers in Kaduna State, Nigeria. This study employed survey research methodology which covered the three agricultural zones in the study area. The data generated were analyzed using descriptive statistics, multiple regression and 4-point likert scale rating. It was shown that, majority (40%) were aged between 31 and 40 years and about 41.20% had no formal education while 16.7% had secondary certificate. The study further revealed that about 48.3% of the respondents had farming experience of 20 years and above and majority (41.67%) sourced a total amount of between N100, 000 and N400, 000 from formal or informal sources. Age, level of education, interest rate, credit awareness and farm income were the major determinants of (p<0.05) credit sourced by the farmers in the study area. Majority of the farmers obtained their credit more from informal sources than formal sources. Inability to receive the amount applied for, risk of repaying the money and problem of getting guarantors were among the major problems under informal sources while high interest rate and inadequate collateral security were for formal sources. Recommendation was made for government to reduce the high interest rate charged on credit facilities. 

Key words: Interest rate, agro- credit access, sources, Kaduna, Nigeria.