Document Type : Regular articles


Department of Agricultural Economics, Federal University of Agriculture. P.M.B 2373 Makurdi, Benue State, Nigeria


This study was undertaken to investigate the impact of microfinance on agricultural productivity by smallholder farmers in Makurdi Metropolis of Benue State, Nigeria. Data were randomly collected from 120 farmers consisting of 60 credit beneficiaries (CB) and 60 non-credit beneficiaries (NCB) by which were analyzed through descriptive statistics and multiple regression analysis. The results of the regression analysis showed a clear impact of microfinance credit on agricultural productivity. Findings revealed that, the accessed credits help farmers to purchase inputs and improve farming technologies which ultimately transformed into higher productivity of the credit beneficiaries as CB farmers realized higher yields (52.1 bags) compared to the NCB farmers (24.6 bags). This is partly because the CB were relatively better in the use of inputs such as adoption of improved seeds, use of fertilizers and affordability of hired labor which ultimately enhanced their farm productivity. The study concluded that though microfinance credits has significant impact on agricultural productivity under smallholder farmers, access to microfinance credits by smallholder farmers in the study area is constrained by lack of microfinance credit information, high interest rates, and inadequate supply of credit institutions as well as risk averse nature of some farmers. Thus, in order to enhance agricultural productivity and improve the well-being of smallholder farmers, it is recommended that smallholder farmers should be facilitated to form “Savings and Credits Cooperative Unions” (SACCOS) for collective responsibilities of accessing credits and paying loans.


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