The Impact of Credit Size and Interest Rates from the Bank of Agriculture on Farmers' Financial Performance in Plateau State
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Abstract
This study investigates the effects of credit size and interest rates from the Bank of Agriculture (BOA) on the financial performance of sweet potato farmers in Barikin Ladi and Riyom LGA, Plateau State, Nigeria. Utilizing a quantitative research design, the study employs a multiple regression model to analyze survey data collected through a census of 289 farmers. The results reveal that credit size has a significant positive impact on financial performance (unstandardized B = 0.237, standardized Beta = 0.154, t = 4.556, p < 0.001), indicating that larger credit allocations enhance farmers’ productivity and profitability. In contrast, interest rates show a positive but statistically insignificant effect on financial performance (unstandardized B = 0.178, standardized Beta = 0.156, t = 1.526, p = 0.128). These findings suggest that while interest rate management remains relevant, it does not exert a substantial influence compared to credit size. The study highlights the importance of increasing credit size to improve financial outcomes for smallholder farmers and recommends that financial institutions prioritize enhancing credit facilities. Future research should explore the long-term effects of credit and interest rate variations and examine the role of financial literacy in optimizing credit utilization.
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