Abstract

Access to credit has been a big problem to farmers in developing countries and to potato farmers in Umuahia North Local Government area in Abia state, it has been an uphill task. Financial institutions shy away from giving loans to farmers because of the variability and the risk inherent in agriculture. This leads to setbacks ingovernment?s bid to diversify the economy through agriculture. The research was centered on thefactors militating access to credit among potato farmers in Umuahia North LGA,Abia state. The research identified the sources of finance available to the farmers; determinants of access to loan by farmers and the constraints faced by the farmers in accessing loans in the study area. In the bid to achieve the objectives, descriptive and inferential statisticswere used to analyze the data procured from 72 respondents used for the study. From the data analysis, personal savings (84.7%), loans from esusu groups( 76.4%) and cooperative societies(69.4%) were the main sources of finance in the study area. Results from the regression analysis showed that sex, marital status, education, household size, cooperative membership and value of collateral were significant and determinant factors having varying degrees of influence in farmers? quest for loan acquisition in the study area. Collateral requirement, high interest rate and hidden charges, were the major limitations faced by farmers trying to obtain loan in the study area. Credit packages meant for farmers are often diverted; Government, through its agencies, should ensure that the credit packages set aside for farmers are not diverted but used to achieve the desired effect.

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