Economics at your fingertips  

Determinants of Agro-Dealers’ Participation in the Loan Market in Nigeria

Aderibigbe S. Olomola

International Food and Agribusiness Management Review, 2014, vol. 17, issue 3, 20

Abstract: Agro-dealership financing deserves policy attention if agro-dealers are to contribute to the success of the ongoing agricultural transformation in Nigeria. Thus, this study seeks to (i) examine the issues influencing the decisions of agro-dealers to participate in the loan market, (ii) analyze the demand for business loan by the agro-dealers and (iii) articulate policy measures for sustainable financing of agro-input business enterprises in Nigeria. The study employed primary data collected through structured questionnaires from 300 agro-dealers and used a Tobit type-II model for the analysis. The results show that interest rate, debt, value of asset, membership of trading association and source of credit are major determinants of loan demand. Agro-dealers need to organize themselves into input trading associations to enhance their creditworthiness and unleash the inherent social capital and information advantages for improved agro-dealership financing. Moreover, diversification of product coverage by agro-dealers and a value-chain approach that links internal financing in the form of trade credit within the agro-input sector with external financing from the commercial banks are strongly recommended.

Keywords: Agribusiness; Agricultural Finance; Demand and Price Analysis; Farm Management; International Development; Land Economics/Use; Political Economy; Risk and Uncertainty (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link) (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

DOI: 10.22004/ag.econ.183449

Access Statistics for this article

More articles in International Food and Agribusiness Management Review from International Food and Agribusiness Management Association Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().

Page updated 2021-01-16
Handle: RePEc:ags:ifaamr:183449