Analysis of Credit access and utilization among oil Palm Fruits processors in Abak Agricultural Zone, Akwa Ibom State, Nigeria

Abstract

The study estimated the determinants of credit access and utilization by oil palm fruit processors in Abak Agricultural Zone, Akwa Ibom State, Nigeria. Data was collected using questionnaire from 140 palm oil processors that were randomly selected through a multi-stage procedure and analyzed using descriptive statistics and the Heckman’s two stage selection model. Findings revealed that of a total sum of N 11,256,500 accessed as credit by oil palm processors N 7, 156, 500 (63.6%) and N 4,100,000 (36.4%) were accessed from informal and formal sources respectively. Also, of the total amount of N 11,256,500 that was accessed, N 4, 165,000 (37%) was ploughed back into oil palm processing, N 6,120,354 (54.4%) was used to solve domestic problems such as hospital bills, school fees, burial, marriage etc. while 971,146, (8.6%) was invested in other ventures outsides oil palm fruit processing. Result of the determinants of credit access showed that while household size (p>0.05) and government payment (p>0.1) negatively and significantly reduced credit access, educational level of respondents (p>0.05), processing equipment ownership (p>0.01) and membership of cooperative (p>0.05) were positive and significantly influence credit access. Findings further revealed that while primary occupation (p>0.05), processing equipment ownership (p>0.05) and government payment (p>0.1) impacted positively on the amount of credit invested in oil processing, household size (p>0.01) had a significant negative influence on amount of credit and income invested in oil palm processing. Hence policies that will boost formal credit access, ensure proper monitoring of loan beneficiaries by supervisors, sensitize respondents on the need to embrace family planning as well as granting tax exemptions and giving subsidies in the form of basic production inputs are recommended among others.