Determinants and Constraints of Access to Credit by Poultry Egg Farmers in Ogun State Nigeria

Abstract

Access to credit is crucial for the advancement of the poultry industry in Nigeria, yet a significant portion of poultry farmers lack access to formal credit sources. This study investigates determinants and constraints to credit access among poultry egg farmers in Ogun State, based on data collected from 180 farmers using a multi-stage sampling technique. Descriptive statistics and a Logit regression model were employed for analysis. About 33.3% of the farmers were within the age range of 41-50, poultry farmers of 62.2% within the region were more of male farmers while 75.6% of the farmers were educated up to tertiary level. Only 45% of respondents had credit access, with varying sources: 19.8% from commercial banks, 37% from cooperatives, 18% from microfinance banks, 2.5% from the Bank of Agriculture, 6.2% from government sources, and 12.3% from private organizations. The Logit model revealed that farming experience and flock size significantly influence credit access (p<0.01). For each year of farming experience, there is a 4.8% increase in the likelihood of credit access. Similarly, for each unit increase in flock size, there is approximately a 0.04% rise in credit access likelihood. Descriptive statistics highlight constraints to credit access: lack of awareness (5.1%), absence of collateral (30.3%), lack of interest (5.1%), loan denial (12.1%), high interest rates (27.2%), regulatory hurdles (8.1%), and inadequate documentation (12.1%). It is recommended that policymakers and financial institutions develop tailored credit products for poultry farmers, addressing specific challenges such as collateral requirements and high interest rates, this is because once financial barriers are removed production is likely to improve. Additionally, enhancing farmer awareness of available credit options and simplifying application processes can improve credit accessibility in the sector.