ABSTRACT
Lack of capital has been identified as one of the constraints faced by small scale farmers. The aim of the project was to assess the effect of microfinance in small scale poultry production with specific objectives to determine its effect on farm size, cost of labour, cost of production, quantity of inputs as well as output among small scale farmers in Egor Local Government Area of Edo State, and also to determine any significant difference between users and non-users. Structured questionnaires were administered to users and non-users, who had been selected using the random sampling technique.
The descriptive statistics such as mean, frequencies, percentages were used to describe the socio-economic characteristics of the respondents and also the volume of loan and interest of the users of microfinance amongst the respondents. The budgetary model was used to determine the cost and return of the respondents. The Multiple Regression Analysis was also used to test the relationship between key independent variables such as loan amount, farm size, inputs, farm output and net income as the dependent variable. Perceptions was used to determine the benefits derived from the use of microfinance. Also, the likert scale was used to determine the constraints faced by the respondents.
The results from the study showed that the gender distribution of respondents showed that 63.33% and 93.33% for non-users and users respectively were male while 36.67% and 6.67% for non-users and users respectively were female. It also showed that 96.7% of the farmers were married, 3.3% were single, 0% were divorced for the non-users of microfinance while for users it indicates that majority 83.3% of the farmers were married, 13.3% were single, 3.3% were divorced. Results also showed a significant difference between users and non-users in farm size, quantity of inputs used, and cost of production, farm output, and income in one cycle of production. From the data given by respondents it was observed that respondents that gets finance from microfinance institutions had a better return on investment of 0.42 while those that are non-users of microfinance reported a return on investment of -0.61. The coefficient of determination R2 indicates that 99.6% of the variation in the dependent variable was explained by the independent variables included in the regression model.
The study therefore shows, that access to microfinance over a long period of time impacts positively on agricultural production. Government and the organized private sector should regularly and timely give finance to farmers.
