: PROFITABILITY OF UTILIZING CREDIT FOR ANIMAL TRACTION: A CASE STUDY OF NORTHERN NIGERIA

Abstract

ABSTRACT Using data collected from 46 farmers participating in the Wark-Oxen Credit Model of National of the livestock Projects Division in north-eastern Nigeria, the paper examines the profitability of using credit for animal traction. Four loan repayment scenarios were simulated based on length of repayment period, with or without annual variation in farm size. The first scenario assumed a three-year repayment period with annual farm size, increase of one hectare. A repayment period of five years with constant farm size and with annual farm increase of one hectare was assumed in the third and fourth scenarios, respectively. Cash flow projections show that only the forth scenario guarantee availability of sufficient funds for reinvestment in animal traction by the farmer at the end of the project, the fact that the use of credit was profitable (as indicated by the fact that the net present value and benefit/cost ratio in all the scenarios, notwithstanding le was. therefore, concluded that the ability of the farmers to sustain animal traction could be enhanced if repayment period beyond the three years adopted in the model studied and if farmers are simultaneously encouraged to gradually increase their farm sizes.