Investigation has shown that farmers in Nigeria are more comfortable taking loan facilities from cooperative societies than taking advantage of similar opportunity in the commercial banks in the country. This was discovered by the National Bureau of Statistics, NBS. The Bureau got this from a joint research it did with the Federal Ministry of Budget and Planning, the Food Agriculture Organisation, FAO, World Bank and others. The report titled “National Agricultural Sample Census” revealed that only 7% of farming communities report receiving micro-credits from banks in Nigeria as of 2022, noting that communities in Lagos and Ogun states had the highest number of farmers receiving agricultural credits from banks at 26% and 14% respectively.
According to the report, the credit facilities from cooperative organisations were a more common medium of credit compared to the banks with about 24% of interviewed communities reporting availability of credit facilities from cooperative organisations.
The report states that “Only 11% of agricultural communities had access to bank loans with most communities across the country reporting even much lower figures.” According to the report, the reason for this development is that “Farming communities prefer loans from cooperative organisations over conventional banks as the former are less demanding in terms of collateral compared to the latter.”
The consortium in their report threw more light on the development. It says that “Data was also collected on the sources of agricultural credit available to members of the community. The community interview result reveals that such credit facilities were not common in Nigeria.”
“Overall, only seven per cent of the communities reported micro-credits and banks as sources of agricultural credit. However, about 14 per cent in Ogun State and about 26% in Lagos State reported micro-credits and banks as their sources of agricultural credit respectively.”
“Of the total communities interviewed, only 2,907 (11% ) reported that their members can borrow money from the banks. While in most of the States, availability of these loans from the banks is low, about 37% of the communities in Lagos State reported the availability of such loans.”
