Effect of credit on crop yield: evidence from maize farmers in the Upper West Region of Ghana

Generally in Ghana, and in the Upper West Region in particular, lack of credit is one of the critical problems hindering growth and productivity. Using household Survey data from the United States Agency for International Development’s Feed the Future initiative, this study employed descriptive statistics, the probit model, and the Heckman selection model to examine the various sources of credit available to farmers in the Upper West Region, factors influencing accessibility to agricultural credit and the effects of credit on maize yield, respectively. The results revealed that the sources of credit in the region are mainly from informal sources such as friends and relatives; others include Banks and NGOs, with little intervention from the government. Factors influencing access to credit include educational level, source of credit and gender. The study further revealed that credit does not have an effect on maize yield in the region due to the limited number of farmers accessing credit. Factors that influence maize yield include farm size and household size. It is therefore recommended that government policy of agriculture inputs subsidy among other interventions be extended to maize farmers in the region. Ghana Lands Commission at the district level and other stakeholders should help, especially rural households, with land entitlement issues. Ministry of Health (MOH) should put birth control mechanisms in place so as to reduce the burden of large household size on input use.