DETERMINANTS OF ACCESS TO MICROCREDIT AND ITS IMPACT ON COCOA YIELD IN OSUN STATE, NIGERIA

Microcredit is crucial to the reduction of poverty in underdeveloped nations. Smallholder farmers benefit from having access to microcredit by raising their standard of living. However, lack of access to microcredit is still the fundamental barrier to the economic progress of farmers. Current studies have been unable to fully comprehend the connection between productivity and microcredit. Therefore, this study investigated the impact of access to microcredit on cocoa yield in Osun State. A multi-stage sampling procedure was employed to select 120 cocoa farmers for the study. Data collected were analyzed using descriptive statistics, binary probit regression, and fractional probit regression models. The results for the entire respondents showed average values of 44 years for age, 22 years for years of experience, 6 persons for household size, and 2.8 hectares for farm size. Binary probit estimates show that off-farm income, years of formal education, marital status and membership of an association were statistically significant factors influencing access to microcredit. Fractional probit estimates show that access to microcredit, formal education, primary occupation, farm size and membership of associations were statistically significant factors influencing cocoa yield. This study concluded that access to microcredit is an important variable affecting cocoa yield. This suggests that policy strategies aimed at improving cocoa productivity must consider access to microcredit. It is therefore recommended that financial institutions should focus on the provision of timely and sustainable microcredit to smallholder farmers to improve their cocoa yield.