Credit supply and resource productivity among farmers group link to banks in Adamawa State, Nigeria

Lending to small-scale farmers has been an important policy measure to stimulate agricultural development in Nigeria. In Adamawa state, small-scale farmers constitute the larger percentage of farmers groups. This study examined the relationship between credit supply and farm revenue among members of farmers group linked to banks for credit delivery in Mubi region. Findings revealed that the credit group members were predominantly of middle age between 30 and 44 years. 5 commercial banks were found to be their major source of credit at an average interest rate of 30% per annum. The result of correlation analysis shows that there is a weak relationship (0.350) between credit supply and farm revenue, while the regression analysis showed that credit supply, cost of credit, cost of fertilizer, seeds and family labour had positive and significant relationship with farm revenue. A decrease returns to scale (0.81) was found to exist in the farm enterprise of credit group members in the region. On the basis of a positive and significant but weak relationship between credit supply and farm revenue, it was recommended that larger volume of credit be made available to farmers’ credit groups for enhanced agricultural productivity.