Determinants of microcredit supply to farmers in Kano State, Nigeria: A Tobit model approach

The objective of this paper was to investigate the factors influencing microfinance banks credit supply to farmers. Microlevel data was gathered from the microfinance banks in Kano State, Nigeria. Evidence reveals that additional marketing staff employed by a microfinance bank increases the rate of credit supply by 10.8%, while increase of 1 km distance away from a bank reduced chances of a farmer being supplied with credit by 19%. However, having a bank account and being a farmer with off-farming business increased the chances of crediting by 10.1% and 11% respectively. Based on these findings, it is recommended that microfinance banks should employ more marketing staff for fund mobilization and disbursement to rural areas. It is also recommended that government should encourage farmers into off-farming businesses.