Assessment of the Performance of Bank of Agriculture in Micro-Credit Delivery to Rural Farmers in Ohafia Local Government Area of Abia State, Nigeria

The study assessed the performance of Bank of Agriculture in micro-credit delivery to rural farmers in Ohafia Local Government Area (L. G. A. ). Both primary and secondary data were employed in the collection of data for the study. Primary data were collected using a well structured questionnaire that was administered to the 120 randomly selected farmer-loan beneficiaries while the secondary data were collected from the existing BOA in the area. Both descriptive and inferential statistics were employed in the analysis of data collected. Objectives i, ii and iii were analyzed using descriptive statistics, objective iv was realized using simple regression analysis while part of objective v was analyzed using mean score (4-point Likert scale) and the other with factor analysis. The result of the analysis showed that majority (98.3 %) of the loan beneficiaries procured micro-scale loans, about 2 % of the loan beneficiaries obtained small and medium scale loan while no respondent acquired large scale loan. The result also showed that the difference in mean between the amount applied and amount granted by BOA to the rural farmers for the past 5years was N2, 556, 042. Equally, the result showed that majority (83.3 %) of the beneficiaries utilized the credit for crop production while the least (3.3 %) utilized the credit obtained for festivities. The result of the regression analysis revealed that the BOA credits have influence on the loan beneficiaries incomes in the area as was testified by coefficient of determination (r2) (0.683) which was positive and statistical significant at 5 % level. Furthermore, the result showed that the major factors that constrained the delivery of credit by the bank to farmers in the area were high illiteracy rate, loan default, lack of disbursable fund, high administrative cost, low repayment rate, loan diversion, political instability and high cost of infrastructural development. Conversely, lack of collateral, high interest rate, inaccessibility of credit, high transaction cost, credit rationing, lack of proper insurance cover, bribery and corruption, lack of awareness and excessive bureaucracy were the constraints to credit acquisition from BOA by the rural farmers. Based on the findings, it was recommended among others that more funds should be provided by the Government to enable institutions disburse credit to the farmers at a single digit interest rate and also there should be timely disbursement of credit to farmers for effective utilization.