Effect of credit utilisation on cashew farm productivity: The study of selected

Abstract

The study ascertains empirically the effect of formal and informal credit utilisation on cashew farmers’ productivity and examine the constraints to credit utilization. The study goes further to determine factors that affect access to formal and informal credit. The probit model was used to determine factors that affect access to formal and informal credit while ordinary least square model was used to ascertain the effect of credit utilisation on productivity. Kendall’s coefficient of concordance was used to rank the constraints to credit utilization. The study finds that access to formal credit is significantly influenced by FBO, farm size and educational status, Sex influences access to informal credit and engaging in other economic activity has a negative significant influence on access to informal credit while savings account and assets ownership jointly influence access to both formal and informal credit. Formal and informal credit utilization has a significant effect on farmers’ productivity. Constraints ranking revealed that the most pressing constraint to credit utilization faced by farmers is price fluctuation while the least pressing constraints to credit utilization faced by farmers is marriage activities. The study recommends that government must set up Cashew Board to control and regulate the price of cashew and also, stakeholders in agricultural industry such as MOFA, NGOs among others should educate and sensitize farmers on the need to join farmer-based organizations.