Do credit constraints affect agricultural technology adoption? Evidence from Nigeria

Bedru Balana, Motunrayo Oyeyemi and Todd Benson

No 53, NSSP policy notes from International Food Policy Research Institute (IFPRI)

Abstract: The agricultural sector in Nigeria is characterized by low productivity that is driven in part by low use of modern agricultural technologies. Poor access to credit is seen by many observers to be one of the key barriers to adoption of these technologies. Literature suggests that credit constraints impede individuals from investing in productivity enhancing agricultural technologies and, thus, poor farmers are unable to engage in high-return agricultural activities. Much policy discourse and research literature associates agricultural credit constraints with supply-side factors, such as farmers not having access to credit sources or high costs of borrowing, and, thus, recommend that such supply-side constraints be addressed to improve smallholders’ access to credit. However, demand-side factors, such as borrower’s risk-averse behavior, financial illiteracy, collateral requirements, or perceived high transactions costs, can also play important roles in credit-rationing for smallholder farmers.

Keywords: agricultural extension; agricultural technology; technology; access to finance; agriculture; smallholders; demand functions; credit; Nigeria; Africa; Sub-saharan Africa; Western Africa (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-agr and nep-fdg
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:fpr:nssppn:53

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