Impact of Agricultural Trade Credit Participation on Credit Access, Yield and Income among Rice Farmers in Northwestern Nigeria

Access to finance remains a critical challenge for small and medium-scale farmers in Nigeria, despite various government and Central Bank of Nigeria (CBN) interventions. This study examines the role of trade credit extended by agro-input vendors as an alternative financing mechanism for rice farmers in Kano and Jigawa states. Using primary data from 481 farmers and employing the Augmented Inverse Propensity Weighted Estimator (AIPW) technique, the study assesses the impact of trade credit participation on credit access, rice yield, and income. Findings reveal that participation in trade credit will lead to an increase of about N50684 in the amount of credit obtained. On the other hand, the yield of rice will increase by 2.55 bags per hectare, while the income from rice cultivation will also increase by N62864.82 per hectare. The results underscore trade credit’s potential to enhance agricultural financing, particularly for smallholder farmers who face barriers to formal credit access. However, effective utilization requires targeted interventions, including financial literacy training and improved market access.