DETERMINANTS OF AWARENESS, PARTICIPATION AND INTENSITY OF USAGE OF TRADE CREDIT AMONG RICE FARMERS IN NORTH-WESTERN NIGERIA

Agricultural credit is pivotal for boosting crop production and improving rural livelihoods. However, many Nigerian farmers face challenges in accessing formal financial services, prompting a reliance on informal trade credit systems. This study investigates the determinants of awareness, participation, and intensity of trade credit usage among rice farmers in Jigawa and Kano States, Nigeria. Using a triple hurdle model and data from 216 rice farmers in Jigawa and 305 in Kano, findings show that 82.53% of farmers are aware of trade credit, and 65.14% participate in such arrangements with agro-input vendors. About 61.62% accessed trade credit ranging from ₦5,000 to ₦20,999, with the average amount being ₦23,074.53. Age and education significantly influence both awareness and participation (p<0.05), while the intensity of usage is affected by farm size, previous experience with trade credit, financial inclusion, crop diversification, and value of rice sold (p<0.05). Despite high awareness, a gap exists in active utilization, potentially due to risk aversion and limited credit amounts. The study recommends enhancing financial literacy, expanding rural financial services, and promoting contract farming to improve access and effective use of trade credit. This research deepens understanding of informal credit systems in agriculture and offers policy insights for sustainable agricultural finance.