EFFECT OF INFORMAL CREDIT ON YAM PRODUCTION IN SHIRORO LOCAL GOVERNMENT AREA OF NIGER STATE, NIGERIA

Abstract

The study examined the effect of informal credit on yam production in Shiroro Local Government Area of Niger State .The specific objectives were to describe the socioeconomic characteristics of yam farmers, identify the sources of informal credit ,determine the effect of informal credit and finally, to identify the problems associated with the acquisition of informal credit in the study area. Primary data were collected from 138 randomly selected yam farmers using multistage-sampling techniques. A well-structured questionnaire was used to elicit the information. Data obtained were analyzed using descriptive statistics (frequency, mean, percentage) and multiple regression. The findings revealed that majority (87.68%) of the respondents were male and they had a mean age of 44 years having one form of formal education (56.52%) or the other. Based on the findings the major source of informal credit identified in the study area was loans from friends and family (76.81%). The results of the regression analysis revealed that informal credit obtained had positive effect on yam production with coefficient of 1.790 and was significant at P<0.1. The study concluded that informal credits have positive effect on yam production which means that the more the use of informal credits by the farmer, the more the output of yam. It was recommended that lenders should repay as at when due so as to be considered for more informal credit in subsequent time.